5.3 Loan Programs and Fees

The penalty for prepayment of an FHA loan during the first 10 years is:

• 2% of the remaining balance

• 90 days of interest on the remaining balance

• 1% of the original loan amount

• nothing

What is the maximum VA loan limit with no down payment?

• as set by the VA

• there is no limit

• whatever is determined by the lender

• 60% of eligibility

Funds for FHA loans are secured from:

• fannie mae

• approved local lenders

• FDIC

• FHA

The payment of $750 on a fixed rate FHA mortgage increases to $755. This increase is probably caused by an increase in:

• real property taxes

• the interest rate

• inflation

• the mortgage insurance premium

A property is purchased for $280,000 with a 95% loan. The lender requires a PMI charge of 0.78% to be paid 1/12 each month. what is the monthly charge for PMI?

• $172.90

• $182

• $2,074

• $2,184

Answer explanation

The loan amount is $266000 (280000 x 0.95) a PMI charge of 0.78% in a decimal format is 0.0078. Multiply that by the loan amount is $2,074.80 a year. divide by 12 and you get $172.90

Which of the following loans would have the highest loan-to-value ratio?

• conventional

• conventional with PMI

• FHA

• VA

Answer explanation

since a VA guaranteed loan does not require a down payment, it has the highest LTV

Under a VA-guaranteed loan, the appraisal is known as the:

• a certificate of reasonable value

• reduction certificate

• estoppel certificate

• certificate of no defense

If a veteran pays off an existing VA loan their eligibility for another VA loan is:

• restored

• terminated

• reduced

• increased

Which of the following statements BEST describes the escape clause in an FHA purchase contract? the buyer must:

• be presented with all closing expenses before close of escrow

• see the appraisal

• receive a statement of all financing charges expressed as an annual percentage rate

• be given a three day right to rescind

A couple who are winning tennis professionals but have no regular/verifiable income want to buy a home. They have a significant amount of money for a down payment and want to pay off the loan in five years. What type of loan are they most likely to be able to obtain?

• FHA loan

• VA loan

• Small Business Administration loan (SBA)

• Personal bank loan