QUESTION 31

What does a FICO score attempt to quantify?

A.A person's creditworthiness

B.A person's character

C.A person's economic standing

D.A person's net worth

2 points

QUESTION 32

Which of the following is NOT something you can do to improve your FICO score?

A.Obtain one or two credit cards and pay entire bill every month

B.Only use a small portion of your available credit.

C.Never miss a payment or be late on anything, credit cards, electric bill, cable bill, etc.

D.Obtain as many credit cards as you can and pay the minimum due each month.

2 points

QUESTION 33

If you have a fixed rate mortgage and the Feds decide to raise interest rates by 1%, what will happen to your monthly payment?

A.It will increase

B.It will remain the same

C.It will decrease

D.It depends on how many discount points you have

2 points

QUESTION 34

Conventional mortgages usually require a 30% down payment.

True

False

2 points

QUESTION 35

A VA loan is considered a secured mortgage and usually requires little or no down payment.

True

False

2 points

QUESTION 36

What type of mortgage is geared towards older people with no heirs. This type of mortgage pays the home owner.

A.Growing equity mortgage

B.Second mortgage

C.Graduated payment mortgage

D.Reverse annuity mortgage

2 points

QUESTION 37

What is an alt-A mortage?

A.A conventional mortage

B.A secured mortage

C.an example of discount points

D.a type of non-traditional morgage

2 points

QUESTION 38

What does a loan servicer do?

A.Handle the monthly payment collection and all the paperwork for a loan in exchange for a fee

B.Create mortgage backed securities

C.This is another name for a pass through

D.All of the above

2 points

QUESTION 39

If you want to buy a bigger house than what you can initially afford, what type of mortgage will let you do thi by increasing the monthlypayments over time?

A.Growing equity mortgage

B.Second mortgage

C.Graduated payment mortgage

D.Reverse annuity mortgage

2 points

QUESTION 40

There is NOT a secondary market for mortgages like there is for stocks.

True

False

2 points

QUESTION 41

How can individual investors participate in the secondary mortgage market?

A.By buying a mortgage

B.By buying a share of an MBS (mortgage backed secuirty)

C.By buyingmortgage stock

D.By buying a share of a CDS (credit default swap)

2 points

QUESTION 42

Explain what PMI is? Who purchases it? Who does it protect? How does it work?