Reviewing Test
Chapter 10 Quiz
Started:
Nov 16, 2017 7:03 PM
Finished: Nov 16, 2017 7:12 PM
1 of 1
Chapter 10 Quiz
Total Grade: 14
(of possible
15
points)
Question 1 of 15 Score: 1
(of possible
1
point)
When compared to a conventional loan, and FHA loan:
A
.
require more stringent qualifying standards
B.
be processed faster
C.
will usually require a lower down payment
D
.
will result in smaller monthly payments
Answer Key: C
Feedback
Explanation: Although the monthly payments on an FHA loan may
be smaller
than those on a comparable conventional loan, since the interest rate will be
lower and the loan may also be made over a longer period of time; the
monthly insurance premium may negate these advantages. Usually FHA
loans require a smaller down payment than conventional loans.
Question 2 of 15 Score: 1
(of possible
1
point)
Which of the following factors would affect the interest rate on a loan for the purchase of a
residential property?
A.
The city in which the property is located
B.
The length of the loan term
C.
The loan-to-value ratio
D.
The borrower's credit rating
E.
Both the length of the loan and the borrowers credit rating.
Answer Key: E
Feedback
Explanation: The length of the loan term will affect the loan's interest rate.
Absent other factors, a 30-year loan will usually have a higher interest rate
than a 15-year loan. The borrower's credit history may also be a factor, to
the extent that a borrower with poor credit or insufficient income may still be
eligible for a subprime loan with a higher interest rate.
Question 3 of 15 Score: 1
(of possible
1
point)
A borrower wants a 90% conventional loan that will be sold to FNMA. He will have to pay for
which of the following?
A.
Private mortgage insurance
B.
FNMA premium
C.
Standard policy of title insurance
D. Survey
Answer Key: A
Feedback
Explanation: FNMA will not buy a loan with a loan-to-value ratio that exceeds
80% unless it is privately insured. The borrower will be required to pay the
private mortgage insurance premium.
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- Fall '17
- Janet Truscott
