HECM Test Questions And Answers

HECM Test Questions and Answers Latest (Verified Answers)

Question 1: The HECM Saver was introduced as an option to

lower the upfront cost of a HECM by reducing the upfront

mortgage insurance premium to:

• 0.
• 0.01% of the Maximum Claim Amount.
• 1% of the Maximum Claim Amount.
• 1.25% of the Maximum Claim Amount.

CORRECT ANSWER : b

Question 2: If repairs are required but can be completed after

closing, the lender will create a repair set-aside in the amount

of:

• 15% of the maximum claim amount.
• 100% of the actual cost of repairs.
• 100% of the estimated cost of repairs.
• 150% of the estimated cost of repairs.

CORRECT ANSWER : d

Question 3: TALC rates generally are greatest when

borrowers live:

• less than their life expectancies.
• to their full life expectances.
• longer than their life expectancies

CORRECT ANSWER : a

Question 4: The net principal limit at closing is:

• a percentage of the maximum claim amount before any

funds are set-aside or any fees are paid.

• the credit remaining after all set-asides and fees have been

deducted.

• the lesser of the home's appraised value or the lending

limit.

• the most HUD will pay on an insurance claim.

CORRECT ANSWER : b

Question 5: Mr. Martin is 83 and his wife is 65. If Mrs.

Martin is removed from the title to the home, the HECM

principal limit would be:

• smaller.
• the same.
• larger.

CORRECT ANSWE R: c

Question 6: T/F Most lenders require that borrowers take a

lump sum payment if they choose an adjustable rate and only allow a creditline with a fixed interest rate HECM.

CORRECT ANSWER : False

Question 7: T/F Given the same principal limit, a term

payment plan will provide a larger monthly payment than a tenure payment plan.

CORRECT ANSWER : True

Question 8: HECM term advances:

• are generally larger than tenure advances.
• are monthly payments for a fixed number of months chosen

by the lender.

• do not allow unscheduled lump sum draws.

CORRECT ANSWER : a

Question 9: A borrower who needs a monthly payment for a

short period of time and then wants to have the opportunity to borrow more in the future may want to choose which type of payment plan?

• Initial Lump Sum
• Modified Tenure