Deck 2: Vocabulary

Question 1

A period payment cap applies to:

A)any mortgage taken out in the U.S.
B)adjustable rate mortgages
C)fixed-rate loans
D)government loans

Answer 1

adjustable rate mortgages

Question 2

The commitment issued by a lender to borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost is called:

A)a rate lock
B)under lock and key
C)a promissory note
D)a deed of trust

Answer 2

a rate lock

Question 3

A fund set aside for replacement of common property in a condominium, PUD, or cooperative project, particularly that which has a short life expectancy, such as carpet or furniture is called:

A)a capital improvements fund
B)a replacement reserve fund
C)a savings fund
D)a contingency fund

Answer 3

a replacement reserve fund

Question 4

A two- to-four family property:

A)Consists of a structure that provides living space for two to four families and ownership is evidenced by two to four deeds
B)Consists of a structure that provides living space for two to four families and ownership is evidenced by a single deed
C)Is not a deeded property
D)Is an illegal form of ownership

Question 5

A home inspection is:

A)a thorough inspection by a professional which evaluates the structural and mechanical condition of a property
B)not required by law
C)often a contingency in a contract that it turns out satisfactorily
D)both A and C

Question 6

Which of the following is not part of loan servicing?

A)Processing payments and sending statements
B)Managing the escrow account
C)Handling pay-offs and assumptions
D)All of the above are part of loan servicing

Question 7

The term "servicing" describes which of the following? Choose all that apply.

A)The collection of mortgage payments from borrowers
B)What the mechanic does to your car
C)Duties of a loan servicer
D)None of the above