Practice Test Geeks(CRU) Certified Residential Underwriter Practice Test
← All CRU Flashcard Decks

Residential Mortgage Products & Guidelines Flashcards

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

Read the first 7 Residential Mortgage Products & Guidelines flashcards as text

  1. A borrower wants a loan that allows interest-only payments for the first 10 years, then amortizes fully over the remaining 20 years. This structure is best described as a:

    Answer: Interest-only fixed-rate mortgage

    An interest-only fixed-rate mortgage features an initial interest-only period followed by fully amortizing principal-and-interest payments for the remaining term.

  2. Under Fannie Mae guidelines, what is the maximum allowable seller concession for a conventional loan with an LTV between 75.01% and 90%?

    Answer: 6%

    Fannie Mae limits seller concessions to 6% of the sales price for conventional loans with LTVs between 75.01% and 90%.

  3. Which loan type requires the borrower to pay both an upfront mortgage insurance premium (UFMIP) and annual mortgage insurance premiums regardless of LTV?

    Answer: FHA loan

    FHA loans require UFMIP at closing plus ongoing annual MIP for the life of the loan (for most loan terms and LTVs).

  4. A 5/1 ARM has a 2/2/5 cap structure. If the initial rate is 4.5%, the maximum rate at the first adjustment is:

    Answer: 6.5%

    The periodic cap of 2% limits the first adjustment to a maximum increase of 2%, so 4.5% + 2% = 6.5%.

  5. A HomeReady loan allows non-borrower household income to be used in which of the following ways?

    Answer: Used as a compensating factor only

    Under HomeReady, non-borrower household income may be considered as a compensating factor to allow a DTI above 45%, but it cannot be added to qualifying income.

  6. Which of the following best describes a piggyback loan structure used to avoid PMI?

    Answer: An 80% first mortgage combined with a 10% second mortgage and 10% down payment

    An 80-10-10 piggyback structure uses an 80% first mortgage and 10% second mortgage so the first lien stays at 80% LTV, avoiding PMI.

  7. Freddie Mac's Home Possible program requires a minimum borrower own contribution from personal funds when the LTV exceeds 80% for a:

    Answer: 2-unit primary residence

    For 2-4 unit properties under Home Possible, borrowers must contribute at least 3-5% from their own funds when LTV exceeds 80%.