Xinnix Ground School Questions with correct Answers

Xinnix Ground School Questions with correct Answers first-time homebuyer Someone who has never owned a home Move-up homebuyer Currently owns, or has previously owned a home and is looking to move up in price, location, size, etc. Relocation Homebuyer Purchasing a new home in a different city or state due to job transfer or personal desire Affluent homebuyer Well seasoned in home buying process. Knowledgeable, financially savvy, busy. Empty-nester homebuyer Experienced homebuyers looking to downsize due to age and no dependent children. Investor homebuyer Well seasoned and knowledgeable about mortgage process. Rate sensitive, smarter, potentially impatient and time sensitive. Looking to close as quickly as possible. End lender in mortgage banking correspondent lender End lender in mortgage brokering wholesale lender Correspondent lenders purchase closed loans from banks and mortgage bankers. Warehouse line of credit. Wholesale lenders Table fund at closing. All closing docs in name of wholesale lender. Fannie Mae (FNMA) Federal National Mortgage Association Freddie Mac (FHLMC) Federal Home Loan Mortgage Corporation FHA Federal Housing Administration VA Veteran's Administration Non-agency loans Comprise any loans not made by the 4 lending agencies Conforming loans Any agency loan Jumbo loan Any conventional loan that is in excess of the loan limits set by Fannie Mae and Freddie Mac. All jumbo loans are, by definition, nonconforming; the reverse, however, is not true. Conventional A loan NOT insured by FHA or VA Non-conforming Any loan that does NOT conform to Freddie Mac or Fannie Mae guidelines URLA Uniform residential loan application. 1003. Construction loan A short-term, interim loan for financing the cost of construction. The lender makes payments to the builder at periodic intervals as the work progresses. Construction-permanent loan Same as Construction loan except that long-term financing replaces the interim financing upon home completion. Primary residence (owner-occupied, principal residence) Residence that the owner physically occupies Secondary residence (second home) Property purchased for occupancy but not considered primary residence. Such as a vacation home. Investment property (rental property) Property purchased by borrower with no intention to occupy and is instead used to establish rental income cash flow. Primary residence Second home Investment property Risk of default to lender rated lowest to highest based on property purpose. Single Family Detached A dwelling with no shared walls, designed to be used by one household Single Family attached Two or more dwellings sharing a common wall. Townhouses and condos Condominium A separate living unit joined together by like units sharing common walls. Townhouse A dwelling of two or three stories that attaches at sidewalls to other units; each person owns walls and air space plus property rights and yard of the unit Duplex, triplex, quadruplex Properties that have 2, 3, 4 units respectively located in one building Planned Unit Development (PUD) A planned combination of diverse land uses, such as housing, recreation, and shopping, in one contained development or subdivision. Fixed-rate mortgage A mortgage where the interest rate and payments remain constant throughout the entire duration of the loan. Adjustable Rate Mortgage (ARM) A loan characterized by a fluctuating interest rate, usually one tied to a specific index. Blend mortgage AKA "term" and "hybrid" ARMs. An ARM that has a fixed rate at the beginning and transitions into an adjustable rate after a predetermined period of time. Denoted as 5/1 ARM in which the first number is it's fixed-rate period and the second is the adjustment period. "Balloon" mortgage a mortgage in which the entire remaining balance of the loan is due in one single payment at the end of a predetermined amount of time unless extended or refinanced. Permanent buy down Uses discount points to permanently reduced the interest rate for the term of the mortgage. Temporary Buydown Temporarily reduces the interest rate at the beginning of the loan. Denoted like this: 3/2/1 Buydown in which the rate is decrease by 3% for the first year, 2% for the second, 1% for the third, and the note rate for the rest of the term. Adjustment period on an adjustable-rate mortgage, the period of time between rate or payment changes Caps Limits placed on payments, interest rates, or balance of a loan that cannot be exceeded. Initial cap Limits the first rate adjustment upward or downward in an ARM Periodic Cap Limits the amount the interest rate of an adjustable-rate loan may increase at any one adjustment period. If not initial cap, periodic cap is assumed. Lifetime cap The maximum interest ra