Exam 10: Lending Practices

A purchaser took out a $50,000 new discount mortgage when he bought his home. The lender charged 2 discount points. On which amount will the mortgagor be paying interest the first month?

A borrower can expect to pay a mortgage insurance premium for

Choose the most appropriate answer for each. -the end of the life of a loan

Choose the most appropriate answer for each. -Federal Housing Administration

Interest paid on a real estate mortgage loan is normally paid annually and in advance.

If a monthly principal and interest payment for a 30-year, 12% loan of $1,000 would be $10.29 what would the monthly payment be for a home purchased at $75,500 with an 80% loan on those terms?

The role of the FHA in residential mortgage lending is loaning the money.

A borrower signs a loan agreement for $50,000. Out of this, the lender charges a $500.00 loan origination fee and two discount points. How much cash does the borrower get?

Loan discount points shorten the repayment time of the loan.

Choose the most appropriate answer for each. -a percentage reflecting what a lender will lend divided by the sale price or market value of the property, whichever is less

A mortgage, which is repaid in regularly scheduled equal installments, is called a balloon mortgage.

Choose the most appropriate answer for each. -a one-time charge by the FHA for insuring a loan

In the event of default and subsequent foreclosure, a VA borrower is responsible for making good any losses suffered.

Under section 203(b), the FHA lends to the secondary market.

A single woman applied for an FHA loan to buy a property she intends to use as a rental. Her application will probably be denied.

A mortgage lender will lend based on a proportion of the appraisal or sale price, whichever is less. This is called the

The relationship between the amount of money a lender is willing to loan and192 the lender's estimate of _________________________ of the property that will serve as security is called the loan-to-value ratio.

In addition to the up-front mortgage insurance premium the FHA now charges a(n)____________________ premium of 1/2 of 1% of the loan balance.

Who must pay the discount points on a FHA loan?

A home sells for $150,000 but is appraised by a lender for $145,000. The lender will typically apply the loan-to-value ratio to the larger of the two numbers.