Mortgage Loan Originator Mortgage Products and Programs 2

Question 1

What is a 'bridge loan' and when is it typically used?

Accepted Answer

A short-term loan used to bridge the gap between buying a new home and selling the existing one

Answer

A government-backed loan for low-income borrowers

Answer

A loan for purchasing commercial bridges

Answer

A loan that connects two lenders on the same property

Question 2

What is the difference between a rate-and-term refinance and a cash-out refinance?

Accepted Answer

Rate-and-term only modifies the rate or term; cash-out provides the borrower with proceeds above the payoff amount

Answer

Rate-and-term changes the lender; cash-out changes the term only

Answer

Rate-and-term requires PMI; cash-out does not

Answer

Rate-and-term is for primary residences only; cash-out is for investment properties

Question 3

A reverse mortgage is designed for homeowners who are at least:

Accepted Answer

62 years old

Answer

55 years old

Answer

60 years old

Answer

65 years old

Question 4

Which type of mortgage loan allows the borrower to pay only the interest for an initial period before principal payments begin?

Accepted Answer

Interest-only mortgage

Answer

Balloon mortgage

Answer

Graduated payment mortgage

Answer

Negative amortization mortgage

Question 5

What is the purpose of mortgage discount points?

Accepted Answer

To prepay interest upfront in exchange for a lower interest rate

Answer

To increase the loan amount

Answer

To reduce the required down payment

Answer

To extend the loan term

Question 6

An assumable mortgage allows the buyer to:

Accepted Answer

Take over the seller's existing mortgage at its original terms

Answer

Skip the appraisal process

Answer

Assume the seller's credit history

Answer

Avoid paying closing costs entirely