General Mortgage Knowledge

A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?

A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?

Under what circumstances can a Qualified Mortgage include a prepayment penalty?

A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?

A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?

Under TRID regulations, discount points must be disclosed on the Loan Estimate in which section?

During the draw period of a HELOC, what type of payments are borrowers typically required to make?

A borrower has a credit card with a $10,000 balance and $200 minimum monthly payment. They plan to pay off $8,000 of the balance before closing, leaving a $2,000 balance with a $40 minimum payment. How should this be calculated for DTI purposes?

An ARM uses the 1-year Treasury index, which is currently at 2.1%. The margin is 2.75%, but the loan has a floor rate of 5.5%. What rate will the borrower pay?

Which statement about prepayment penalties is correct under federal regulations?

A veteran with a 30% service-connected disability rating is purchasing a second home as an investment property. How does the VA funding fee apply in this situation?

In a county where the conforming loan limit is $766,550, a borrower obtains an $800,000 loan. Six months later, the conforming limit increases to $850,000 due to area median home price changes. The loan classification:

A married couple purchased a home together 3 years ago. Now they are divorcing, and one spouse wants to refinance the existing mortgage to remove the other spouse from the loan while keeping the same loan amount. The spouse remaining on the loan will be the sole borrower. How is this transaction classified?

A purchase transaction closing is scheduled for the 29th of the month, but the seller requests to delay until the 3rd of the next month to avoid capital gains tax implications. The borrower's rate lock expires on the 30th. What is the most likely outcome?

A balloon mortgage has a 7-year term with a 30-year amortization schedule. At the end of 7 years, what is the borrower typically required to do?

A borrower has a monthly gross income of $8,000. Their proposed mortgage payment is $2,200 (including PITI), and they have additional monthly debt obligations of $600. If the lender's maximum front-end DTI is 28% and back-end DTI is 36%, what is the borrower's situation?

A mortgage lender sells a pool of loans to a government-sponsored enterprise but retains the right to collect payments from borrowers. What is this arrangement called?

What is the upfront mortgage insurance premium (UFMIP) for most FHA loans?

Which of the following indexes is most commonly used for adjustable-rate mortgages and is considered the most stable?

Which of the following fees would NOT be included in the points and fees calculation under the ATR/QM rule?

A borrower in San Francisco is obtaining a $1,100,000 loan for a single-family home purchase. Assuming San Francisco is a high-cost area, what type of loan is this?

A borrower is purchasing a home for $350,000 in an area where the FHA loan limit is $472,030. If they make the minimum down payment, what will be their loan amount?

If Fannie Mae and Freddie Mac both offer to purchase a conventional loan, but Freddie Mac's price is significantly higher, what might explain this pricing difference?

What is the 2024 conforming loan limit for a single-family home in most areas of the United States?

In high-cost areas, the conforming loan limit for 2024 can be as high as what amount for a single-family home?

What happens to conventional loans that exceed conforming loan limits?

In 2024, what is the conforming loan limit for a two-unit property in a standard cost area?

Which of the following is typically true about jumbo loans compared to conforming loans?

What is the minimum down payment requirement for an FHA loan?

A borrower is purchasing a home for $950,000 in a standard cost area with a 20% down payment. What type of loan would they need?

A borrower refinances their home with a cash-out refinance loan of $750,000. The original loan balance was $400,000, and they're taking $300,000 in cash. If conforming limits allow $766,550, how is this loan classified?

A conventional loan that exceeds conforming loan limits but meets all other GSE underwriting standards would be considered:

A lender originates a $400,000 conventional loan that meets all GSE guidelines except it has a 45% debt-to-income ratio when the maximum allowed is 43%. This loan would be classified as:

A lender packages a $500,000 conventional loan that meets all current GSE standards but was originated using outdated underwriting software that didn't verify employment in the required manner. This loan would be:

Which factor would cause a $650,000 loan to be non-conforming in an area where the conforming limit is $766,550?

A borrower refinances their existing FHA loan with a current balance of $180,000 through the FHA Streamline Refinance program. The new loan amount after refinancing is $185,000. How is the annual MIP calculated for this loan?

Which of the following is true about FHA loan limits?

A borrower is purchasing a home for $350,000 in a county where the FHA loan limit is $420,680. The borrower makes a 5% down payment and finances the MIP. What is the loan-to-value ratio used for calculating the annual MIP?

For FHA loans with a loan-to-value ratio greater than 90%, how long must the borrower pay annual mortgage insurance premiums (MIP)?

What is the maximum loan-to-value ratio for an FHA purchase loan with the minimum down payment?

An FHA borrower has been paying annual MIP for 8 years on a loan with an original LTV of 89%. The current unpaid principal balance represents 76% of the original property value. What happens to the MIP?

An FHA borrower has a loan amount of $300,000 with an 85% LTV ratio. When can the annual MIP be removed from this loan?

A condominium project has 85% of its units sold to owner-occupants and 15% to investors. The project has been approved by FHA for 2 years. A borrower wants to purchase a unit with an FHA loan. What additional requirement must be met?

An FHA borrower with a 580 credit score wants to purchase a home for $200,000. What is the minimum cash investment required from the borrower's own funds?

Which of the following properties is NOT eligible for VA loan financing?

Which of the following is a basic eligibility requirement for a VA loan?

A veteran with full VA loan entitlement wants to purchase a home for $400,000 in a county where the VA loan limit is $350,000. What is the maximum VA loan amount available without a down payment?

What is the minimum length of active duty service required for VA loan eligibility during peacetime?

What is the VA funding fee for a first-time VA loan user purchasing a home with no down payment?

Which veterans are exempt from paying the VA funding fee?