A type of loan program that provides the borrower with funds based on equity. They do not have to repay the loan as long as they live in the home.
What is a reverse mortgage?
100
This insures loans. The loans are insured by the federal government against borrower default.
What is the Federal Housing Administration?
100
The amount above the index that an interest rate can adjust for an ARM. It is set by the lender and is the amount above the index that the interest rate can adjust.
What is margin?
100
Areas of the country with higher conforming loan limits. They exist all over the country with the exception of the Midwest.
What are high-cost areas?
100
A payment made by a lender to a loan originator for originating a loan at a rate higher than the par rate.
What is YSP?
Bonus Question for double points on this question: What is the only use for YSP?
200
The same as a second mortgage. It may also be called a junior lien.
What is a subordinate lien?
200
These can result in negative amortization. Negative amortization occurs when the borrower makes payments at an introductory rate which are not sufficient to pay the interest on the loan.
What are Option ARMS?
200
Used to determine the interest rate change on an arm.
What are index and margin?
200
These are used to adjust the price of a loan.
What are discount points?
200
It is disclosed on the early ARM disclosure provided at application and on the promissory note when the loan goes to closing.
What is the index for an ARM?
300
A series of smaller periodic payments with a larger lump sum due at maturity.
What is a balloon payment provision?
300
These are products of the secondary market.
What are mortgage-backed securities?
300
This is required for FHA loans with an LTV of less than or equal to 90%. For the first 11 years of the loan term or until the end of the loan term, whichever comes first.
What is MIP?
300
Loans with higher interest rates, made to borrowers with blemished credit or other qualification issues. They do not conform with Fannie Mae and Freddie Mac underwriting requirements.
What are subprime loans?
300
**DAILY DOUBLE**
400
A table providing the periodic payments needed to pay off a loan by the end of its term. The payments include principal and interest.
What is an amortization schedule?
400
The stated interest rate on a mortgage or loan agreement
What is the note rate?
400
This program is called 203(b). It is used to purchase or refinance one to four unit family dwellings.
What is FHA's primary fixed rate program?
400
A limit on the amount that the interest rate can increase during the first adjustment period for an ARM.
What is an initial rate cap?
400
These loans meet loan limits and underwriting standards established by Fannie Mae and Freddie Mac.
What are conforming loans?
500
It is ______ purpose to provide sources of funds for lenders. This is accomplished in the secondary market through securitization.
What is Fannie Mae?
500
Made by Fannie Mae and Freddie Mac. These are unlike FHA or VA loans as they are not insured or guaranteed by a government agency.
What are conventional loans?
500
This department guarantees loans. These loans provide a guaranty to lenders for a certain percentage of the loan amount.
What is the Department of Veterans Affairs?
500
The limit on the amount that an interest rate can change over the life of an ARM. It is also known as a rate ceiling.
What is a lifetime rate cap?
500
A purchase transaction where the party selling the property provides all or part of the financing. This often occurs in a loan assumption.