10 Questions
A credit card balance is an example of an installment debt.
False
Loan-level price adjustments (LLPAs) reflect risk levels.
True
Fannie Mae and Freddie Mac require private mortgage insurance on all loans with loan-to-value ratios over 80%.
True
Making a lump sum payment to the lender to lower the buyer's interest rate is known as a buydown.
True
In a temporary buydown where the monthly payment increases each year, it is called a level payment buydown.
False
For a temporary buydown on a fixed-rate loan, the lender will use the note rate to qualify the buyer.
False
Having held the same job for ten years is a compensating factor that may enable an underwriter to approve a loan with a high debt-to-income ratio.
False
A student loan with five years of monthly payments remaining is an example of an installment debt.
True
Court-ordered child support payments are considered part of an applicant's total monthly obligations.
True
Loan-level price adjustments (LLPAs) are charged only for investor loans or ARMs.
False
Test your knowledge on piggyback loans, conventional loan characteristics, and qualifying standards, including evaluating risk factors like credit reputation and loan-to-value ratios. Learn about how secondary financing can help avoid private mortgage insurance and jumbo loan designations.
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