A first-time homebuyer in Texas is comparing FHA and VA loan options. Which statement accurately distinguishes a key difference between these two government-backed loan programs as used in Texas?
Correct Answer
B) FHA loans require a minimum 3.5% down payment while VA loans allow zero down payment for eligible veterans
FHA loans require a minimum 3.5% down payment, while VA loans offer 100% financing (zero down) to eligible veterans. Both are secured by a deed of trust in Texas, and both are available for properties across a wide price range.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
More Tx Specific Financing Questions
A Texas reverse mortgage borrower has a homestead valued at $300,000 with no existing liens. Under the 80% LTV rule, the lender offers a reverse mortgage equal to 50% of the maximum allowed. How much will the borrower receive?
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A buyer in Dallas is purchasing a home for $240,000 using an FHA loan with 3.5% down. The annual MIP rate is 0.55% of the base loan amount. What is the monthly mortgage insurance premium for the first month?
A Texas homeowner takes out a home equity loan and later wants to refinance it. Under Texas Constitution Article XVI, Section 50(f), how long must the homeowner wait after the original home equity loan was closed before refinancing?
A Texas homeowner applies for a home equity loan on March 1 and receives the required disclosure notice the same day. The lender wants to close as quickly as possible. Under Texas law, what is the earliest the lender can disburse the loan proceeds after closing?
- → A Texas property owner defaults on both a first mortgage and a second-lien home equity loan. The first mortgage lender forecloses and sells the property at the trustee's sale. Under Texas law, what happens to the second-lien home equity loan?
- → Under Texas foreclosure law, a property is sold at a trustee's sale on the first Tuesday of the month. The winning bidder pays the full purchase price. Under Texas Property Code, when does the bidder receive a trustee's deed?
- → In Texas, the standard security instrument for real estate loans is a deed of trust rather than a mortgage. Which parties are involved in a Texas deed of trust?
- → Under Texas Constitution Article XVI, Section 50(a)(6), a home equity loan on a Texas homestead must comply with numerous constitutional requirements. All of the following are required provisions of a Texas home equity loan EXCEPT:
- → Under Texas Constitution Article XVI, Section 50, all of the following liens may be enforced against a Texas homestead EXCEPT:
- → A Texas homeowner closes on a home equity loan on January 15. The loan proceeds are not actually disbursed until January 18, three days after closing. The borrower exercises the right of rescission on January 26. Under Texas Constitution Article XVI, Section 50(a)(6), is this rescission timely?
- → A Texas lender fails to cure a constitutional defect in a home equity loan within the required timeframe. The borrower files a lawsuit. Under Texas Constitution Article XVI, Section 50(a)(6)(Q)(x), what is the potential penalty for the lender's failure to cure?
- → A Texas lender makes a home equity loan that violates one of the requirements of Texas Constitution Article XVI, Section 50(a)(6). After the loan is made, the lender discovers the violation. Under Texas law, the lender has how many days to cure the defect after being notified by the borrower?
- → A Texas homeowner obtained a home equity loan that violated the constitutional requirements under Article XVI, Section 50(a)(6). The lender claims it did not know about the violation. The borrower sends a written notice of the defect to the lender. Under Texas law, which of the following correctly describes the cure and forfeiture process?
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