General Mortgage Knowledge Flashcards

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1

Acceptable occupancy types conventional/conforming loans

1. Primary
2. Secondary
3. Non-owner occupied

2

Current loan limits, conventional/conforming loans

$510,400
High cost: $765,600

3

Conventional/conforming Loans maximum LTV

95% LTV (Purchase & refi)
85% (non-owner occupied)
80% LTV (Cash Out)

4

Current loan limits, conventional/conforming loans

$510,400
High cost: $765,600

5

Conforming/Conventional Max DTI

28% / 36%

6

Conforming/Conventional min FICO score

620

7

Conforming/conventional loan late fees

5% of P&I

8

Conforming/conventional Loan max seller concessions

3% if LTV > 90.01%
6% if LTV = 75.01-90%
9% if LTV ≤ 75%

9

Typical cost of PMI

0.5% to 1% of loan amount

10

PMI stands for

Private Mortgage Insurance

11

PMI is removed at what LTV?

78% LTV
Borrower can request removal at 80% LTV

12

MI (Mortgage Insurance) formula

Loan Amount x MI Rate ÷ 12

13

AUS stands for

Automated Underwriting System

14

FNMA & FHLMC AUS

FNMA: DU and DO
FHLMC: LPA

15

FNMA & FHLMC Application Forms

FNMA: 1003/URLA
FHLMC: Form 65

16

GNMA stands for

Government National Mortgage Association
AKA Ginnie Mae

17

GNMA insures/guarantees these types of loan products

FHA
VA
USDA

18

FHA stands for

Federal Housing Administration

19

VA stands for

Veterans Affairs

20

USDA stands for

United States Department of Agriculture

21

FHA Loan minimum credit score

580
500-579 if LTV < 90%

22

FHA Late Fee %

4% of P&I

23

FHA Maximum LTV

Purchase: 96.5% LTV
Refinance: 97.75% LTV
Cash out: 80% LTV

24

FHA Maximum DTI

31% / 43%

25

FHA MIP (Mortgage Insurance Premium) if LTV < 90%

11 years

26

# of years FHA MIP if LTV > 90%

Life of loan

27

FHA UFMIP %

1.75%

28

VA Loan maximum LTV

100%

29

VA Loan maximum DTI

41% / 41%

30

Maximum origination fee for VA loan

1%

31

Types of loans that always require an escrow account

FHA, VA, USDA

32

Types of loans that are assumable

FHA
VA

33

VA Late Fee %

4% of P&I

34

VA Funding Fee for 1st time usage with 0% down payment

2.3%

35

VA Funding Fee with > 5% down payment

1.65%

36

VA Funding Fee with > 10% down payment

1.4%

37

VA Funding Fee for IRRRL

0.5%

38

VA Funding Fee for purchase transactions (subsequent usage) with 0% down

3.6%

39

VA Funding Fee for cash-out refi (first use)

2.3%

40

VA Funding Fee for cash-out refi (subsequent use)

3.6%

41

Exemptions from VA funding fee (2)

- Veterans who have service-connected disability (10%+)
- Surviving spouse of veteran who died during service or as a result of service

42

The Residual Income Qualification Test includes this in addition back-end debt

1. State, federal and social security taxes
2. Estimated utilities
3. Childcare expenses

43

COE stands for

Certificate Of Eligibility

44

USDA Guarantee Fee %

1%

45

USDA Loan maximum DTI

29% / 41%

46

USDA Loan only offered in these areas

Rural areas, population of 35,000 or less

47

USDA loan late fees

4% of P&I

48

Types of 2nd liens (3)

1. HEL
2. HELOC
3. Purchasemoney 2nd AKA Piggyback

49

HEL stands for

Home Equity Loan

50

HELOC stands for

Home Equity Line Of Credit

51

4 examples of conventional/non-conforming loans

1. Jumbo
2. Alt-A
3. Subprime
4. 2nd liens

52

ARM stands for

Adjustable Rate Mortgage

53

# of years ARM loan must be

30 years

54

Meaning of ARM CAP expression
For example: 2/2/5

Initial rate cap/Periodic rate cap/lifetime rate cap

55

2 items that make up fully indexed rate

Index + Margin

56

3 most common indexes

1. COFI
2. LIBOR:London InterBank Offered Rate
3. T-BILL/CMT:Treasury Bill Index/Constant Maturity Treasury Index

57

COFI stands for

San Francisco 11th district Cost of Funds Index

58

LIBOR stands for

London InterBank Offered Rate

59

T-BILL/CMT stands for

Treasury BILL Index / Constant Maturity Treasury Index

60

Balloon Mortgage Minimum term (years)

5 years

61

Balloon Mortgage main features (3)

1. Do not full amortize
2. Last month payment is remaining balance (balloon payment)
3. 5-year minimum term

62

Construction loan payments typically start ___ after loan consummation

6-24 months

63

Take-out loan definition

Long-term financing that replaces short-term interim financing (ex: construction loans)

64

GPM stands for

Graduated Payment Mortgage

65

The final rate on a GPM is also known as the ___ rate.

note

66

HECM stands for

Home Equity Conversion Mortgage (Reverse Mortgage)

67

Borrower’s must be __ years or older to be eligible for a HECM (reverse mortgage)

62