Mortgage Loan Originator MCQ Flashcards
7 cards from real Mortgage Loan Originator 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 Loan Originator MCQ flashcards as text
A 'yield spread premium' (YSP) historically referred to:
Answer: Compensation paid by a lender to a broker for delivering a loan at an above-par interest rate
A yield spread premium was compensation a lender paid to a mortgage broker when the broker originated a loan at an interest rate higher than the par rate.
Which of the following is NOT one of the three C's of credit underwriting?
Answer: Convenience
The three C's of mortgage underwriting are Capacity (ability to repay), Credit (credit history), and Collateral (property value)—Convenience is not one of them.
A 'no-cost' mortgage loan typically means:
Answer: Closing costs are rolled into the loan balance or covered by a higher interest rate
In a no-cost mortgage, closing costs are either financed into the loan amount or offset by a higher interest rate that generates lender credits.
Under the SAFE Act, an individual who takes a residential mortgage loan application and offers or negotiates terms is considered a:
Answer: Mortgage loan originator
The SAFE Act defines a mortgage loan originator as any individual who takes a residential mortgage loan application or offers or negotiates terms of such a loan.
Which type of income is typically considered the most stable and easiest to verify for mortgage qualification purposes?
Answer: W-2 salaried income
W-2 salaried income is considered the most stable and straightforward to document, as it is consistent and verifiable through pay stubs and tax returns.
A 'teaser rate' on an adjustable-rate mortgage refers to:
Answer: An artificially low initial interest rate that adjusts upward after a set period
A teaser rate is a below-market introductory interest rate on an ARM that resets to a higher rate after the initial fixed period ends.
When a mortgage loan is 'sold on the secondary market,' it means the lender has:
Answer: Transferred the loan to another investor such as Fannie Mae or Freddie Mac
Selling a loan on the secondary market means the originating lender transfers ownership of the loan to investors like Fannie Mae, Freddie Mac, or private investors.