Mortgage types, loan qualification, and financing concepts tested on state real estate licensing exams.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is the maximum loan-to-value ratio (LTV) typically required for a conventional loan without private mortgage insurance?
- 80%. An LTV above 80% typically requires PMI.
- What does FHA stand for in real estate lending?
- Federal Housing Administration.
- What is the typical minimum down payment required for an FHA loan?
- 3.5% of the purchase price.
- Who is eligible for a VA (Veterans Affairs) loan?
- Military service members, veterans, and surviving spouses of veterans.
- What is the primary advantage of a VA loan regarding down payment?
- No down payment is typically required (0% down).
- What does USDA stand for in the context of real estate financing?
- United States Department of Agriculture.
- What geographic areas does a USDA loan typically serve?
- Rural and some suburban areas designated by the USDA.
- What is a conforming loan in real estate lending?
- A mortgage that meets the lending standards set by Fannie Mae and Freddie Mac.
- What is the current Federal conforming loan limit for a single-family home (2024)?
- $766,550 for most of the United States.
- What is a non-conforming loan?
- A mortgage that exceeds the conforming loan limit or does not meet standard lending requirements.
- What is the standard debt-to-income ratio threshold for qualifying for a conventional mortgage?
- Typically 43% or less, though some lenders allow up to 50%.
- What does DTI stand for in mortgage lending?
- Debt-to-Income ratio.
- What is pre-qualification for a mortgage?
- An informal estimate of how much a borrower might be able to borrow based on self-reported financial information.
- What is pre-approval for a mortgage?
- A lender's commitment to lend a specific amount after verifying income, assets, and credit.
- What is PMI and when is it required?
- Private Mortgage Insurance, required when a borrower puts down less than 20% on a conventional loan.