Mortgage Loan products

A high cost home loan may legally include a balloon payment in only specific situations which are these? (3)

Irregular/seasonal income

short term bridge loans

balloon payment quaified mortgage

home ownership counseling is required in transactions for all of the following (3)

High cost mortgage

reverse mortgage

negative amortization

construction loans principal is?

repaid when all the work is completed

tila and permitted apr in fixed rate mortgages?

.125 or 1/8

For first-time homebuyers, the Fannie Mae HomeReady loan requires a down payment of at least:

3%

what is the least expensive reverse mortgage

single purpose

common indices

treasury bill index, COFI, secured overnight financing rate

The government national mortgage association (Ginnie Mae)

guarantees mortgages that are federally-insured or -guaranteed loans

A type of reverse mortgage offered to low-income borrowers for a designated purpose, such as to pay taxes or to complete a home repair, is known as a

Single purpose reverse mortgage

Which of the following is a limit on the amount that the interest rate can change, up or down, on any adjustment date?

periodic rate cap.

Standard income qualification for a salaried borrower applying for a conforming loan typically includes:

30 day paystubs and w-2s for the recent two years

Which of the following is a limit on the amount that the payment can change on any adjustment date from the current or previous payment amount on an ARM?

payment cap

The typical pattern of payments on a 30 year loan with an interest-only payment for the first 5 years is:

smaller payments, then larger payments. With an interest-only loan, payments are low for the period of time during which only the interest due is paid. At the end of that period, when repayment of principal begins, the payment amount increases because it covers not only the interest due, but also the amount of principal necessary to pay off the loan during its term.

Which affects the index rate in an adjustable rate mortgage

Market conditions.


While the margin remains the same throughout the term of an adjustable-rate mortgage, the index may change. Such changes are based on interest rates and market conditions nationally and internationally.

ARM restrictions

Federal law does not place general restrictions on the adjustment period allowed on an ARM.

if there are no caps the arm would be determined ?

If there were no caps involved, an ARM would adjust based on the movement of the fully-indexed rate (margin + index).

Fannie Mae

Buys mortgages mostly from large commercial banks (e.g., Chase, Bank of America)

Uses Desktop Underwriter (DU)