Mortgage Products and Programs 2

Question 1

What is the maximum DTI ratio typically allowed for a USDA Guaranteed Loan without compensating factors?

Accepted Answer

41%

Answer

36%

Answer

45%

Answer

50%

Question 2

Which mortgage product allows a borrower to draw funds, repay, and redraw during the draw period?

Accepted Answer

HELOC

Answer

Home Equity Loan

Answer

Cash-out refinance

Answer

Reverse mortgage

Question 3

A 5/1 ARM means the rate is fixed for the first 5 years, then adjusts every:

Accepted Answer

1 year

Answer

5 years

Answer

6 months

Answer

2 years

Question 4

The Fannie Mae HomeReady program is designed primarily for:

Accepted Answer

Low-to-moderate income borrowers

Answer

Veterans and active-duty military

Answer

Self-employed borrowers only

Answer

Borrowers with jumbo loan needs

Question 5

Which loan program insures mortgages for properties in rural and suburban areas and requires no down payment?

Accepted Answer

USDA Rural Development Loan

Answer

FHA Section 203(k)

Answer

VA Loan

Answer

Fannie Mae HomeReady

Question 6

A balloon mortgage typically requires full repayment of the remaining principal:

Accepted Answer

At the end of a short term (e.g., 5 or 7 years)

Answer

After each payment adjustment

Answer

Only if the borrower refinances

Answer

When the LTV reaches 80%

Question 7

Which feature of an ARM caps the maximum amount the interest rate can increase at each adjustment?

Accepted Answer

Periodic cap

Answer

Lifetime cap

Answer

Payment cap

Answer

Index floor