Practice Test Geeks(CMA) Certified Mortgage Advisor Practice Test
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Mortgage Products and Programs Flashcards

7 cards from real CMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Mortgage Products and Programs flashcards as text

  1. Under the Freddie Mac CHOICERenovation loan, what is the maximum percentage of the 'as-completed' value that can be financed for renovations?

    Answer: 75%

    Freddie Mac's CHOICERenovation allows renovation costs up to 75% of the as-completed appraised value of the property.

  2. What is the key difference between an FHA Streamline Refinance with appraisal vs. without appraisal?

    Answer: With appraisal can increase loan balance to cover closing costs; without appraisal limits the balance to the original amount

    An FHA Streamline with appraisal can use the new appraised value to support a larger loan amount that may include closing costs.

  3. A borrower takes out a graduated payment mortgage (GPM). What happens to their monthly payments over time?

    Answer: Payments start lower, increase for a set period, then level off for the remaining term

    GPMs start with lower-than-standard payments that increase at a set rate each year for a specified period before leveling off.

  4. The VA loan benefit includes an exemption from which cost that conventional borrowers typically pay?

    Answer: Private mortgage insurance (PMI)

    VA loans do not require private mortgage insurance regardless of the down payment amount, which is a major financial benefit.

  5. Which program allows non-occupant co-borrowers' income to be used on a HomeReady loan to help the primary borrower qualify?

    Answer: It is allowed when the co-borrower is a family member and the primary borrower occupies the property

    HomeReady permits non-occupant co-borrowers when they are family members, allowing their income to supplement qualification for the occupying borrower.

  6. A lender offers a 'no-closing-cost mortgage.' What is the typical trade-off for the borrower?

    Answer: The borrower receives a higher interest rate, with the lender using yield spread to cover costs

    In a no-closing-cost loan, the lender charges a higher interest rate and uses the resulting yield spread premium to pay closing costs.

  7. Which type of second mortgage maintains a fixed credit limit that the borrower can draw from, repay, and draw again during the draw period?

    Answer: Home equity line of credit (HELOC)

    A HELOC is a revolving line of credit secured by home equity that allows multiple draws and repayments during the draw period.