Trivia 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 Trivia flashcards as text
What is the name of the index most commonly used for adjustable-rate mortgages tied to the Secured Overnight Financing Rate?
Answer: SOFR
SOFR (Secured Overnight Financing Rate) replaced LIBOR as the preferred benchmark index for adjustable-rate mortgages after LIBOR's phase-out.
Which type of mortgage loan is backed by the U.S. Department of Agriculture and designed for rural and suburban homebuyers?
Answer: USDA loan
USDA loans are guaranteed by the U.S. Department of Agriculture and offer 100% financing to eligible buyers in designated rural areas.
What is the term for a mortgage where the interest rate is fixed for an initial period, then adjusts periodically based on a market index?
Answer: Adjustable-Rate Mortgage (ARM)
An ARM has an initial fixed-rate period followed by periodic rate adjustments tied to a benchmark index plus a margin.
What minimum credit score does the FHA typically require for a borrower to qualify for a 3.5% down payment?
Answer: 580
FHA allows a 3.5% down payment for borrowers with a credit score of 580 or higher; scores between 500–579 require 10% down.
What document provides a final itemized list of all closing costs and is delivered to the borrower at least three business days before closing?
Answer: Closing Disclosure
Under TRID, the Closing Disclosure replaced the HUD-1 and must be delivered at least three business days before loan consummation.
What is the name of the VA funding fee exemption category that applies to veterans receiving VA compensation for service-connected disabilities?
Answer: Veterans with service-connected disability ratings
Veterans who receive VA disability compensation for service-connected disabilities are exempt from paying the VA funding fee.
What term describes the difference between a home's appraised value and the outstanding mortgage balance?
Answer: Home Equity
Home equity is the portion of the property's value that the homeowner actually owns, calculated as appraised value minus outstanding mortgage balance.