General Mortgage Knowledge

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 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?

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?

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

A borrower is refinancing a $350,000 property. The existing first mortgage balance is $200,000, and they want to take $75,000 cash out. What will be the new LTV ratio?

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

A borrower submits a loan application but fails to provide their Social Security number, claiming privacy concerns. The MLO has obtained the borrower's name, income, estimated property value, loan amount, and property address. According to TRID regulations, what is the status of this submission?

A borrower has a 5/1 ARM with an initial rate of 3.5%. The loan uses the 1-year Treasury index, which is currently at 2.0%, and has a margin of 2.75%. What will the borrower's new interest rate be at the first adjustment, assuming no rate caps apply?

A borrower's homeowners insurance policy is cancelled mid-term due to non-payment, but the escrow account shows the premium was paid. Investigation reveals the insurance company applied the payment to a different policy number. What should the servicer do?

A lender packages a $500,000 conventional loan that meets all current GSE standards but was originated using outdated underwriting software that didn't verify employment in the required manner.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

An MLO receives a loan application where the borrower lists their income as 'self-employed - varies monthly.' No specific dollar amount is provided. The borrower states they will provide tax returns later. What is the status of this application under TRID?

A balloon mortgage requires full payment of the remaining balance after 7 years. If this loan is considered a 'qualified mortgage' under the ATR rule, which condition must be met?

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?

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's home is worth $400,000 with an existing first mortgage balance of $250,000. If a lender's policy allows a maximum combined loan-to-value (CLTV) ratio of 80% for HELOCs, what is the maximum HELOC amount available?

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?

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?

A borrower's escrow account shows a $300 surplus at the annual analysis. The projected escrow payments for the upcoming year total $4,800. What is the maximum cushion the servicer can maintain?

Which of the following best describes the current USDA upfront guarantee fee?

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

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

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?

A borrower has an existing conforming loan of $600,000 and wants to get a second mortgage for $200,000 on the same property in an area with an $850,000 conforming limit. What determines if the second mortgage can be conforming?

An FHA borrower obtained their loan in 2012 with a 95% LTV. They have been paying annual MIP for 11 years and the current loan balance is 82% of the original property value. The borrower requests MIP cancellation. What action should be taken?

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?

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?

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

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?

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?

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?

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?

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?

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

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

A borrower with a 560 credit score wants to use gift funds for their entire down payment on an FHA loan. What is the minimum down payment percentage required?

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

A veteran wants to use their VA loan benefit to purchase a $500,000 home in an area where the VA loan limit is $400,000. If they make a $25,000 down payment, what amount can they finance with the VA loan?

A borrower applies for an FHA loan in a county where the loan limit is $472,030. They want to purchase a duplex for $650,000 and live in one unit while renting the other. What is the maximum FHA loan amount available?

Which of the following scenarios would allow a veteran to use their VA loan benefit while still having an existing VA loan?

A veteran has $50,000 in remaining VA entitlement and wants to purchase a home for $500,000. What is the minimum down payment required?

What happens to a veteran's VA loan entitlement when they sell their home and pay off the VA loan?

What happens to the USDA annual guarantee fee if a borrower makes a down payment of 10% or more?

A borrower wants to purchase a home for $200,000 using a USDA Rural Development loan. What would be the upfront guarantee fee?

A borrower has a 30-year fixed-rate mortgage with a principal balance of $200,000 and an interest rate of 6% annually. What is the monthly interest payment for the first month?

What is the current USDA guarantee fee structure for Rural Development loans?

Which of the following best describes the income documentation requirements for USDA Rural Development loans?