Loan Disbursement Options and Payment Plans Flashcards
7 cards from real CRMP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Loan Disbursement Options and Payment Plans flashcards as text
Which HECM disbursement option provides equal monthly payments to the borrower for as long as they occupy the home as their primary residence?
Answer: Tenure payment plan
The tenure payment plan provides equal monthly payments for as long as the borrower occupies the home as their primary residence, with no defined end date.
Under HUD's initial disbursement limit rule, what is the maximum percentage of the available principal limit a borrower may typically draw during the first 12 months?
Answer: 60%
HUD regulations limit borrowers to drawing no more than 60% of their available principal limit during the first 12 months, or mandatory obligations plus 10%, whichever is greater.
A borrower selects a HECM adjustable-rate line of credit and makes no draws for several years. What happens to the unused portion of the line of credit over time?
Answer: It grows at the same rate as the loan's interest rate plus the annual MIP rate
The unused portion of a HECM line of credit grows at the loan's interest rate plus the annual MIP rate, increasing the borrower's available funds over time.
Which HECM disbursement option is ONLY available with a fixed interest rate product?
Answer: Single lump sum disbursement
The single lump sum disbursement is the only option available with fixed-rate HECMs; all other disbursement options require an adjustable-rate HECM.
A borrower selects a 'modified tenure' payment plan. What two components does this option combine?
Answer: A line of credit set-aside with monthly tenure payments
A modified tenure plan combines a line of credit set-aside with monthly tenure payments, giving the borrower both a reserve amount and regular lifetime monthly disbursements.
Under the mandatory obligations exception to the 60% initial disbursement limit, a borrower may draw additional funds primarily to:
Answer: Pay off existing mortgage liens and satisfy other required closing costs
Mandatory obligations include existing mortgage liens, closing costs, and other required payoffs; borrowers may draw whatever is needed to satisfy these plus up to 10% of the principal limit.
Which HECM disbursement option provides equal monthly payments for a specific number of years chosen by the borrower, after which disbursements stop?
Answer: Term plan
The term payment plan provides equal monthly payments for a fixed number of years specified by the borrower; when the term ends, payments cease but the loan remains outstanding.