Mortgage Products and Programs Flashcards
6 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 6 Mortgage Products and Programs flashcards as text
What is the primary advantage of an FHA loan compared to a conventional loan for first-time homebuyers?
Answer: Lower minimum credit score and down payment requirements
FHA loans offer lower minimum credit score requirements (as low as 580 for 3.5% down) and more flexible underwriting, making homeownership accessible to more borrowers.
A VA loan is available to eligible veterans and active-duty service members and features which of the following unique benefits?
Answer: No down payment requirement and no private mortgage insurance
VA loans offer eligible military borrowers 100% financing (no down payment) and no PMI, significantly reducing upfront and ongoing costs.
USDA Rural Development loans are designed for borrowers who:
Answer: Meet income limits and are purchasing in eligible rural and suburban areas
USDA Rural Development loans target low-to-moderate income borrowers purchasing homes in USDA-eligible rural and suburban areas, offering 100% financing.
What distinguishes a 'jumbo loan' from a conforming loan?
Answer: Jumbo loans exceed the conforming loan limits set by FHFA
A jumbo loan exceeds the conforming loan limits established by the FHFA and cannot be purchased by Fannie Mae or Freddie Mac, requiring different underwriting standards.
A 5/1 ARM mortgage means:
Answer: The rate is fixed for 5 years, then adjusts annually
A 5/1 ARM has a fixed rate for the initial 5 years, after which the rate adjusts once per year based on an index plus margin.
Which mortgage program is specifically designed for purchasing and renovating a property in a single loan?
Answer: FHA 203(k) rehabilitation loan
The FHA 203(k) loan combines the purchase price and rehabilitation costs into a single mortgage, allowing buyers to finance both acquisition and renovation.