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Questions and Answers
A discount point is BEST described as a charge the borrower pays to:
A discount point is BEST described as a charge the borrower pays to:
If the required down payment is 20%, how much additional money will the buyer need to provide toward the down payment at closing?
If the required down payment is 20%, how much additional money will the buyer need to provide toward the down payment at closing?
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicant's monthly income?
If an applicant works 40 hours every week and is paid $13.52 per hour, what is the applicant's monthly income?
The requirement for private mortgage insurance is generally continued when the loan-to-value ratio falls below:
The requirement for private mortgage insurance is generally continued when the loan-to-value ratio falls below:
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Which of the following documents itemizes all settlement costs including lender charges?
Which of the following documents itemizes all settlement costs including lender charges?
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According to the Truth-in-Lending Act (TILA), the term 'refinance' applies to:
According to the Truth-in-Lending Act (TILA), the term 'refinance' applies to:
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What does a loan originator use to determine the estimated value of a property based on an analytical comparison of similar property sales?
What does a loan originator use to determine the estimated value of a property based on an analytical comparison of similar property sales?
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Which of the following methods of disclosure does NOT meet the requirements of Equal Credit Opportunity Act (ECOA)?
Which of the following methods of disclosure does NOT meet the requirements of Equal Credit Opportunity Act (ECOA)?
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Term '20 basis points' expressed as a percentage is:
Term '20 basis points' expressed as a percentage is:
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According to the Truth-in-Lending Act (TILA), which of the following fees is EXCLUDED from the calculation of the annual percentage rate?
According to the Truth-in-Lending Act (TILA), which of the following fees is EXCLUDED from the calculation of the annual percentage rate?
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FHA loans are:
FHA loans are:
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The late fee for a conventional loan is:
The late fee for a conventional loan is:
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A funding fee is required for a:
A funding fee is required for a:
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A Mortgage Insurance Premium is required on:
A Mortgage Insurance Premium is required on:
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The mortgagee is the:
The mortgagee is the:
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The borrower does NOT sign which document?
The borrower does NOT sign which document?
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Which document is usually NOT recorded?
Which document is usually NOT recorded?
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A mortgage title insurance policy is NOT
A mortgage title insurance policy is NOT
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Which parties sign the deed?
Which parties sign the deed?
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When the mortgagor and the mortgagee title insurance policies are issued at the same time, this is known as:
When the mortgagor and the mortgagee title insurance policies are issued at the same time, this is known as:
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Study Notes
Mortgage Concepts
- Discount Point: A fee paid to a lender to lower the mortgage interest rate.
- Earnest Money and Down Payment: For a property valued at $160,000 with a 20% down payment, after initial payments, the additional required down payment is $25,000.
- Monthly Income Calculation: A worker earning $13.52 per hour, working 40 hours weekly, has a monthly income of $2,343.47.
Mortgage Insurance and Fees
- Private Mortgage Insurance (PMI): Required when the loan-to-value ratio is above 80%.
- Documents for Settlement Costs: The HUD-1/Closing Disclosure outlines all settlement costs, including lender charges.
- Truth-in-Lending Act (TILA): Defines refinancing as replacing an old obligation with a new one.
Property Valuation and Disclosure
- Appraisal: A loan originator uses an appraisal to estimate property value based on similar property sales.
- Equal Credit Opportunity Act (ECOA): Disclosure requirements exclude methods like telephone communication.
Interest Rates and Fees
- Basis Points: "20 basis points" is equivalent to 0.20%.
- APRs Exclusions: Hazard insurance is excluded from the calculation of annual percentage rate.
- FHA Loans: These loans are partially guaranteed by the government.
Loan Conditions and Requirements
- Late Fees: A conventional loan incurs a late fee of 5% on principal and interest.
- Funding Fee Requirement: Required for VA loans; FHA loans do not incur this fee.
- Mortgage Insurance Premium: Essential for FHA loans.
Loan and Mortgage Documentation
- Mortgagee: This term refers to the lender involved in the mortgage agreement.
- Document Signing: Borrowers do not sign the deed, but they do sign the HUD-1/Loan Disclosure, mortgage, and note.
- Recordable Documents: The note is typically not recorded, whereas the assignment of mortgage, deed, and mortgage are.
Title Insurance and Deed Signing
- Mortgage Title Insurance Policy: It is based on the loan amount but is not optional; rather, it is typically required by the lender.
- Deed Signing Requirements: The grantor and two witnesses must sign the deed.
Title Insurance Policies
- Simultaneous Issuance: Occurs when the mortgagor and mortgagee title insurance policies are issued together.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Prepare for the NMLS exam with this set of challenging flashcards. Each card presents a scenario or question to test your understanding of key mortgage concepts and practices. Boost your knowledge and confidence before taking the test.
