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Products and Programs Flashcards

7 cards from real Mortgage practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Products and Programs flashcards as text

  1. Which government-backed loan program charges both an Upfront Mortgage Insurance Premium (UFMIP) and an annual MIP?

    Answer: FHA loan

    FHA loans require a UFMIP (typically 1.75% of the loan amount) plus annual MIP paid monthly for the life of most loans.

  2. A construction-to-permanent loan differs from a standalone construction loan because it:

    Answer: Automatically converts to a permanent mortgage after construction

    A construction-to-permanent loan closes once and converts to a long-term mortgage when construction is complete, saving closing costs.

  3. The VA funding fee for a first-time use, no-down-payment purchase by an active-duty veteran is approximately:

    Answer: 2.15%

    As of current VA guidelines, the funding fee for a first-time use purchase with no down payment is 2.15% of the loan amount.

  4. An interest-only mortgage allows borrowers to pay only interest for a set period, which means:

    Answer: Monthly payments are lower during the IO period but principal is not reduced

    During the interest-only period, payments cover only interest, so the principal balance stays the same until amortization begins.

  5. The FHA 203(k) loan is specifically designed to finance:

    Answer: Purchase and renovation of a home in a single loan

    The FHA 203(k) program allows borrowers to finance both the acquisition and rehabilitation of a property with one loan.

  6. Freddie Mac's Home Possible program allows a minimum down payment of:

    Answer: 3%

    Home Possible permits a down payment as low as 3% for qualifying low-to-moderate income borrowers.

  7. A jumbo loan is defined as a loan that exceeds the:

    Answer: FHFA conforming loan limit

    Jumbo loans exceed the conforming loan limits set annually by the Federal Housing Finance Agency (FHFA) and are not eligible for purchase by Fannie Mae or Freddie Mac.