8. MLDS & Other Items Quiz

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What would be the monthly payment for principal and interest on a $500,000 loan with a fixed 6% interest rate?

$4,000.00
$2,997.75 (correct)
$3,275.00
$2,785.25

What does the Annual Percentage Rate (APR) include?

Fees affecting only lenders
Property taxes and insurance costs
Interest and fees for a comprehensive yearly cost view (correct)
Only the interest rate

How are closing costs categorized?

Only into Non-Recurring costs
Into Prepayment and Escrow costs
Only into Recurring costs
Into Recurring and Non-Recurring costs (correct)

What is the main purpose of the Mortgage Loan Disclosure Statement (MLDS)?

To offer borrowers detailed loan and closing cost information (D) Signup and view all the answers

Why is the Annual Percentage Rate (APR) standardized as a yearly percentage?

To facilitate comparison across loans or investments (A) Signup and view all the answers

What is the purpose of an impound account mentioned in the text?

To manage pre-paid funds for property taxes and insurance (C) Signup and view all the answers

What is the purpose of prorated payments calculated at closing?

To adjust costs for the time period up until the next due date (D) Signup and view all the answers

What is the primary role of a Mortgage Banker?

Handling the application, underwriting, approval, and closing processes (D) Signup and view all the answers

What is the main purpose of APR?

To provide a consistent basis for comparing financial products (D) Signup and view all the answers

What type of fees are included in APR?

Yearly interest, annual fees, origination fees, and closing costs (D) Signup and view all the answers

What is the purpose of the HUD-I APR Table?

To display excluded items from APR (A) Signup and view all the answers

What is the primary role of a Mortgage Broker?

Works as an intermediary, finding the best lender for the borrower's situation. (D) Signup and view all the answers

What is the role of a Mortgage Banker in the loan process?

They handle the application, underwriting, approval, and closing. (D) Signup and view all the answers

What is the primary function of a Mortgage Loan Disclosure Statement (MLDS)?

To provide a detailed breakdown of mortgage loan costs. (D) Signup and view all the answers

What does APR stand for?

Annual Percentage Rate (B) Signup and view all the answers

What are Non-Recurring Closing Costs (NRCCs)?

One-time payments made during the settlement (B) Signup and view all the answers

What is an impound account used for?

Managing pre-paid funds for property taxes and insurance (B) Signup and view all the answers

Which of the following is NOT a type of closing cost?

Annual Percentage Rate (APR) (C) Signup and view all the answers

When is mortgage insurance typically required?

If the down payment is less than 20% (C) Signup and view all the answers

What does Title Insurance primarily provide protection against?

Title defects or legal claims to the property (A) Signup and view all the answers