QUIZ: Test your mortgage knowledge

What’s the first thing you need to do if you're interested in buying a house?

Start shopping for houses online.

Get prequalified for a home loan amount by a mortgage lender.

Ask friends and family for a referral to a realtor.

Which entity does not lend home loans for residential properties?

Commercial banks and credit unions.

Mortgage lenders.

Private insurance companies.

You're interested in an FHA loan insured by the Federal Housing Administration because of its lower down payment and more flexible credit requirements. Where can you get one?

Directly from the FHA.

From any lender approved by the Department of Housing and Urban Development to write FHA-insured loans.

From any lender.

What is an APR?

The Annual Purchase Report a lender may provide after you close on your property.

The Annual Percentage Rate attached to a home loan that includes the mortgage interest rate and other loan charges.

The Annual Points Rate on a mortgage that calculates the extra home loan points that may be charged by a lender.

What is a GSE?

Government Sponsored Exchange: A government transaction for a first-time homebuyer.

Government Sponsored Entity: Related to any government-created mortgage program.

Government Sponsored Enterprise: Such as Fannie Mae or Freddie Mac created to enhance credit flow and encourage homeownership.

Will you always get the lowest mortgage rate from any lender or financial institution?

No, private banks provide better rates, as long as you're a loyal customer.

No, you have to compare mortgage rates between lenders, as well as the benefits of the loan programs they offer, to see if you're getting the most competitive loan package to fit your current financial needs.

Yes, market mortgage rates are the same for all customers.

What’s used to describe the holding of documents or funds by a third-party before closing?

Escrow.

Good Faith Estimate.

Cash reserves.

How much borrower DTI (Debt-to-Income) ratio is suggested for a standard home loan?

20 percent.

From 28 to 36 percent.

50 percent.

When is PMI (Private Mortgage Insurance) required?

Only in certain states with PMI laws.

On some home loans with a down payment less than 20 percent.

On all home loans.

What type of mortgage may provide a borrower with a monthly check instead of a borrower paying out a monthly payment?

Conventional loan.

Reverse mortgage.

FHA or VA loan.

Which mortgages may not require a down payment for borrowers who qualify?*

*Ask your loan officer about several low to no-down payment mortgage programs available for eligible borrowers.

USDA, FHA disaster relief, and VA.

FHA and ARM.

FHA and Conventional.

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