Post-License Ch11 Quiz Questions Only – answers will be revealed with Post-License subscriptions

1 of 10 – The “cap” on an adjustable-rate mortgage limits?
How much the payment can increase.
How much the interest rate can increase.
How much money can be borrowed.
The term of the loan (to only 15 or 20 years).

2 of 10 – A “conventional” mortgage?
Is not guaranteed or insured by a government agency.
Cannot be used to purchase custom built homes, but only conventional “cookie-cutter” type homes.
Is a mortgage that is offered only by banks and credit unions.
Cannot be sold in the secondary markets.

3 of 10 – The difference between a standard fixed-rate and a simple interest mortgage is?
The simple-interest mortgage uses an interest rate calculation that is simpler and easier to understand.
The interest rate is lower on a standard mortgage.
The simple-interest mortgage has a longer grace period.
With a simple-interest mortgage, interest is calculated daily rather than monthly.

4 of 10 – Your client has an FHA ARM and closes on his new house on August 23, 2017. The first rate adjustment can occur?
On September 23, 2017.
Before August 23, 2018.
Between August 23, 2018, and February 23, 2019.
On March 23, 2019.

5 of 10 – The “due-on-sale” clause in a mortgage note means?
The balance of the mortgage is due if the lender sells the loan on the secondary market.
The balance of the loan is due when the current homeowner sells the house.
The balance of the loan is due when the current homeowner puts the house up for sale.
The balance of the loan is due if the homeowner tries to sell the house at below-market rates.

6 of 10 – A balloon mortgage?
Has payments that increase significantly over time.
Has an interest that starts low, but “balloons” after a few years.
Has standard, 30-year fixed-rate payments, but the full principal of the loan is due all at once at some point in the future.
Does not have a “due-on-sale” clause.

7 of 10 – When an Option ARM is “recast”?
The payments are adjusted so that the loan will be paid off on time.
The interest rate is adjusted to match current market rates.
It is sold to a lender on the secondary market.
It is converted to a fixed-rate loan.

8 of 10 – The Act which prohibits borrowers from being discriminated against due to race, religion, sex, age, or country of national origin is?
The Equal Credit Opportunity Act.
The Truth-in-Lending Act.
The Borrower Disclosure Statement.
The Fairness Act of 1974,

9 of 10 – The statute that requires lenders to disclose the total cost of a mortgage is called?
The Equal Credit Opportunity Act.
The Truth-in-Lending Act.
The Lender Disclosure Statement.
The Affordable Mortgage Act.

10 of 10 – Your client chooses an adjustable-rate mortgage in which the initial introductory rate stays the same for 7 years, then adjusts once every year for the next 23 years. This type of ARM is called?
A rate cap ARM.
A 10/30 ARM.
A 7/27 ARM.
A 7/1 ARM.

Post-License Ch11 Quiz Questions Only

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