Podcast
Questions and Answers
What is the primary purpose of the course Mortgage Loan Brokering and Lending?
What is the primary purpose of the course Mortgage Loan Brokering and Lending?
What role does a broker typically play in a mortgage transaction?
What role does a broker typically play in a mortgage transaction?
Which of the following is NOT considered an institutional lender?
Which of the following is NOT considered an institutional lender?
An institutional lender might decline a loan application due to which factor?
An institutional lender might decline a loan application due to which factor?
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What does the front-end ratio assess?
What does the front-end ratio assess?
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The back-end ratio evaluates which aspect of a borrower's finances?
The back-end ratio evaluates which aspect of a borrower's finances?
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Why are private lenders more inclined to issue higher risk loans?
Why are private lenders more inclined to issue higher risk loans?
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Which option is an example of a soft money loan?
Which option is an example of a soft money loan?
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Which is a reason institutional lenders might decline a loan?
Which is a reason institutional lenders might decline a loan?
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What does a back-end ratio indicate?
What does a back-end ratio indicate?
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Study Notes
Mortgage Loan Brokering and Lending Quiz Notes
- Mortgage Loan Brokering: Necessary course for real estate broker licensing; optional for real estate salesperson licensing.
- Brokers' Role: Act as third parties who arrange transactions between principals, not as the borrower or lender directly.
- Institutional Lenders: Examples include commercial banks, savings banks, and government-chartered corporations like FNMA and FHMLC.
- Loan Denial Factors: Institutional lenders may refuse loans based on property type, lack of credit history, or high debt-to-income ratios.
- Front-End Ratio: Measurement of the borrower's capacity to pay based on income vs. housing costs.
- Back-End Ratio: Evaluates monthly housing costs plus other long-term debts against total monthly income.
- Private Lender Risk: Willing to take on higher-risk loans due to potential for greater returns, not necessarily due to government insurance or sale to Fannie Mae.
- Soft Money Loans: Typically involve seller financing or are arranged through mortgage brokers, different from institutional loans.
- Equity Loans: Based on the difference between a property's fair market value and outstanding loans, rather than solely on the borrower's credit score or interest rate.
- Characteristics of Brokered Loans: Loans through mortgage brokers from private lenders may lack longer terms, lower interest rates, or reduced fees compared to institutional lender loans.
Mortgage Loan Brokering and Lending Quiz Notes
- Mortgage Loan Brokering: Necessary course for real estate broker licensing; optional for real estate salesperson licensing.
- Brokers' Role: Act as third parties who arrange transactions between principals, not as the borrower or lender directly.
- Institutional Lenders: Examples include commercial banks, savings banks, and government-chartered corporations like FNMA and FHMLC.
- Loan Denial Factors: Institutional lenders may refuse loans based on property type, lack of credit history, or high debt-to-income ratios.
- Front-End Ratio: Measurement of the borrower's capacity to pay based on income vs. housing costs.
- Back-End Ratio: Evaluates monthly housing costs plus other long-term debts against total monthly income.
- Private Lender Risk: Willing to take on higher-risk loans due to potential for greater returns, not necessarily due to government insurance or sale to Fannie Mae.
- Soft Money Loans: Typically involve seller financing or are arranged through mortgage brokers, different from institutional loans.
- Equity Loans: Based on the difference between a property's fair market value and outstanding loans, rather than solely on the borrower's credit score or interest rate.
- Characteristics of Brokered Loans: Loans through mortgage brokers from private lenders may lack longer terms, lower interest rates, or reduced fees compared to institutional lender loans.
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Description
Explore the essential concepts of mortgage loan brokering and lending with this comprehensive quiz. Understand the roles of brokers and institutional lenders, learn about loan denial factors, and dive into the ratio measurements that influence borrower capacity. Perfect for those preparing for real estate licensing exams.
