Mortgage Fundamentals

What is the benefit of Mortgage Insurance (MI) for the Lender?
Risk protection
The borrower will put down more than 20%
More money for the lender
It is optional
What are the 3 C's
Credit, Capacity, Character
Credit, Capacity, Capital
Credit, Capacity, Collateral
Types of Credit
Traditional
Nontraditional
Trended
Transunion
Credit score consists of
Payment History
Credit History
Types of Credit
Length of Credit
Amount of Debt
How many homes you've owned
What is the Appraisal?
Describes the Property
Estimates Value
Positive and Negative factors of property
Gives opinion of home and condition
What is DTI
Debt to Income
Debt towards Insurance
Down Payment Towards Insurance
Designation towards Income
What is LTV?
Lien To Value
Loan to Value
Leave to vacate
Loan to Verify
Which is the correct formula to calculate LTV?
Property Value/Original Loan
Original Loan x Property Value
Original Loan/ Property Value
Property Value+ Original Loan
What is the formula for DTI?
All monthly expenses/Total Income
Monthly Debt / Total Income
Mortgage+Groceries+Gas/Total Income
Income/ Mortgage Payment
Our Loan process begins with disclosures.
True
False
A 5/6 ARM is adjusted how often (after first 5 year years)
6 years
5 years
6 months
5 months
Calculate the DTI: PITIA-$857.00, Auto Loan-$400.00, CC Debt-$350, Income-$4,000
40.17%
59.83%
40%
60%
Calculate LTV. Home Value-$200,000.00, Down Payment-$40,000.00, Loan Amount-$160,000.00
60%
70%
80%
90%
Match the words to the definitions
Conventional (Conforming)
Freddie Mac, Fannie Mae,
Lien
FHA, Veterans
Refinancing Cash out
Loans that accomodate for people who do not meet specific requirements
Government
Collateral to be used as security for debt
Refinancing Rate-Term
Replace a current home loan with a new one
Non-QM
Receiving cash based on the equity you have acquired
Loan Note
Promissory agreement for lender and borrower
Government Loans require MI
True
False
Conventional loans do not require PMI if the LTV is under 80%
True
False
What is the role of the underwriter?
Evaluates financial information and credit
Verifies employment
Chooses to approve or Decline
Signs Documents
What is the role of the Loan servicer?
Call and check in on home owners
Collect Mortgage Payments
Fund Escrow Account
Pass P&I to investor
Deals with collections and foreclosures
Receives payment for servicing loans
Types of Property
2-4 units
SFR
PUD
Hotels
Condotel
Trailers
Manufactured Homes
Condo
Apartments
Townhomes
An Investment Property is
Bought by an Investor
Income-producing property
In another country
Sold only when an investor puts a down payment of over 20%
Where does the mortgage process begin?
Borrower begins to look at Zillow for homes for sale
Borrower begins speaking with an MLO
Borrower sells their current home
Borrower gets a credit report
Which is the correct order of our process?
Borrower, Disclosures, Underwriting, Quality Control, Closing, Closing Day, Servicing, Post Closing
Borrower, Disclosures, Quality Control, Underwriting, Closing, Day, Closing, Servicing, Post Closing
Borrower, Disclosures, Underwriting, Quality Control, Closing, Closing Day, Post Closing, Servicing
Borrower, Disclosures, Underwriting, Quality Control, Post Closing, Closing Day, Closing, Servicing
If Judy closed on her home June 14th when is her first Mortgage Payment Due?
July 1st
June 14th
August 1st
September 1st
P&I stands for
Property and Insurance
Principal and Investment
Principal and Interest
Property and Investment
ATR means
Amortization to return
Ability to repay
Actual Type Residency
Ability to Refinance
What makes us different?
Expertise
Technology
Streamlined loan Process
Less expensive
Variety of Programs
CD stands for
Closing Deposit
Closing Disclosure
Coverage Deposit
Credit Debt
CTC stands for
Coverage to Close
Clearance to Close
Choice to Close
Credit to Capacity
Dan has a loan balance of $140,000.00 and gets an appraisal of his property which is valued at $400,000.00. Calculate the LTV
65%
30%
35%
60%
Select all types of assets
Fully-owned vehicle
CD or Depository Accounts (Checking/Savings)
Sale of Property
Monthly Allowance from Parents
Retirement Funds (Pension, 401k)
Business Assets
Stocks and Bonds
Frank wants to buy a home in Florida but he knows he will be relocating for work in 4 years. Which is better?
Fixed-rate
ARM
After how many days does a borrower acquire a penalty?
15 days
16 days
30 days
When a borrower takes out a mortgage the collateral for the loan is the ______
Mortgage Insurance
Down Payment
Property
Escrow Account
What will a property go into foreclosure?
60 days- 2months
90 days- 3 months
When the borrower loses his job
After a 15 day late payment
Freddy is considering refinancing but he want's to know how much equity he has in his property. His original property value is $720,000.00. He has paid off 70,000 over 10 years and placed a $50,000 down payment. The current market value of his home is 890,000. What is his current equity?
13.48%
16.67%
20.12%
65.16%
Select all "other sources of income"
Commission
Overtime
Social Security
Investment/Trust
Child Support
Rental Income
Babysitting Money
Allowance
Chore money
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