Finding a Mortgage

Ready to test your knowledge? You'll have ten multiple choice questions to answer. Click on each question to reveal the question and multiple choice answers. After you've completed answering all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

Question 1

As part of the loan terms, lenders may request that you establish an escrow account for the term of your loan for the payment of:

(A) Property taxes and homeowner's insurance.	Correct Incorrect
(B) Private mortgage insurance.	Correct Incorrect
(C) Interest to be paid on the loan.	Correct Incorrect
(D) Property maintenance and upkeep.	Correct Incorrect

Question 2

A "Good Faith Estimate" is:

(A) Documentation provided by a potential lender that gives you an estimate of the settlement charges and terms of a loan.	Correct Incorrect
(B) The certification provided by a professional appraiser that gives you the appraised price of the home you intend to purchase.	Correct Incorrect
(C) A document that seller's of homes are required to provide to potential buyers showing that the asking price of the home was fairly arrived at.	Correct Incorrect
(D) The document you or your realtor will provide to the seller of a home that documents your offering price for the home.	Correct Incorrect

Question 3

Which of the following IS NOT a type of mortgage:

(A) Conventional	Correct Incorrect
(B) Non-Conforming	Correct Incorrect
(C) FHA	Correct Incorrect
(D) HUD	Correct Incorrect

Question 4

For single-family home purchases in the continental United States, a non-conforming or "Jumbo" mortgage is required for loan amounts above:

(A) $417,000	Correct Incorrect
(B) $625,500	Correct Incorrect
(C) $250,000	Correct Incorrect
(D) $1,000,000	Correct Incorrect

Question 5

If you elect a 5/1 Adjustable Rate Mortgage, your rates will:

(A) Remain constant for the first five years of the loan term and then adjust each year thereafter.	Correct Incorrect
(B) Adjust once a year for the first five years and then remain stable for remainder of the loan term.	Correct Incorrect
(C) Feature a 5% APR at first and then adjust up or down by 1% each year, depending on the direction of interest rates.	Correct Incorrect
(D) Feature a low 1% introductory rate for the first year and then adjust to 5% for the remainder of the loan term.	Correct Incorrect

Question 6

Which of the following ARE NOT included in a Good Faith Estimate?

(A) A summary of the loan and terms being offered.	Correct Incorrect
(B) Summary of settlement charges or closing costs.	Correct Incorrect
(C) Escrow account information.	Correct Incorrect
(D) A comparison to rates and fees offered by other lenders in your area.	Correct Incorrect

Question 7

It may make sense to buy mortgage discount 'points' (or pay a charge for a specific interest rate as noted on a Good Faith Estimate) for a lower interest rate if you:

(A) Need to lower your monthly payment in order to fit under a debt-to-income or housing ratio guideline.	Correct Incorrect
(B) Plan on staying in your home for an extended number of years and paying more up front for a lower interest rate will lower your long-term interest payments.	Correct Incorrect
(C) Both A and B	Correct Incorrect
(D) Neither A or B	Correct Incorrect

Question 8

Which of the following IS NOT a condition for obtaining a FHA (Federal Housing Administration) Loan?

(A) The borrower must pay an upfront mortgage insurance premium (MIP) of 1.00% of the home loan, regardless of their credit score.	Correct Incorrect
(B) The borrower must make a down payment equal to 20% of the home's value.	Correct Incorrect
(C) The property you are purchasing must meet certain minimum government standards at appraisal.	Correct Incorrect
(D) The borrower must pay a monthly mortgage insurance premium (MIP) based on the borrower's loan-to-value (LTV) ratio and length of loan.	Correct Incorrect

Question 9

With a fixed rate loan, your interest rate will:

(A) Always stay the same for the entire length of the loan term.	Correct Incorrect
(B) Always be lower than rates offered on adjustable rate mortgages.	Correct Incorrect
(C) Always be equal to the 'prime rate'.	Correct Incorrect
(D) Eliminate any need for you to pay for mortgage insurance.	Correct Incorrect

Question 10

An "interest rate lock":

(A) Guarantees that you will get the interest rate and points the lender quoted you, even while the loan is being processed.	Correct Incorrect
(B) Is an alternative phrase used to describe a Fixed Rate Loan.	Correct Incorrect
(C) Represents the initial period of an adjustable rate mortgage which at the end of, the interest rate 'unlocks' and can be adjusted based on current market rates.	Correct Incorrect
(D) None of the above.	Correct Incorrect

	Correct	Incorrect
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Question 10

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