Cwmc Module 22: Mortgage Competency Test

14 Questions | Total Attempts: 11

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Module Quizzes & Trivia

This quiz is part of LFE Institute's CWMC (Certified Workplace Money Coaching) course. It will test your proficiency in the Mortgage Module (Module 22) of the program. The questions are all multiple choice, and are designed to be a review of this Module. Let LFE know when you've successfully completed this test and are ready to begin the next Module. Correct answers required for passing grade: 13/15


Questions and Answers
  • 1. 
    Which of the following is a benefit of a Balloon ARM?
    • A. 

      Payments increase when rates rise

    • B. 

      Low initial rate compared to fixed rate

    • C. 

      No stability; payments vary with market

    • D. 

      May need to refinance to pay off balloon

    • E. 

      Rates at payoff could be cost prohibitive

  • 2. 
    Which of the following will NOT influence the selection of the best mortgage?
    • A. 

      Rate stability

    • B. 

      Time frame

    • C. 

      Monthly mortgage payment

    • D. 

      Closing costs

    • E. 

      HIPAA status

  • 3. 
    Common mortgage myths include: (check all that apply)
    • A. 

      “The best mortgage has the lowest upfront cost.”

    • B. 

      “My mortgage lender will look out for me.”

    • C. 

      “Home buyers can determine the interest rate they pay in a variety of ways."

    • D. 

      “The best mortgage has the lowest interest rate.”

    • E. 

      “Adjustable-rate mortgages can be risky.”

  • 4. 
    Which of the following are key questions a consumer should ask a mortgage broker? (check all that apply)
    • A. 

      What size down payment do I qualify for and how was that figure calculated?

    • B. 

      What is your ethnicity?

    • C. 

      Are discount points available and should I pay them?

    • D. 

      Can I escrow my car insurance payments in with my mortgage insurance?

    • E. 

      During the entire period I plan to own the home, what is my total mortgage cost?

  • 5. 
    To correct typos in your Money Coaching response, the best Microsoft Word tool to use is:
    • A. 

      AutoFormat

    • B. 

      Bullets and Numbering

    • C. 

      Spelling and Grammar (spell check)

    • D. 

      Print Preview

    • E. 

      Word Count

  • 6. 
    Advantages of reverse mortgages include: (check all that apply)
    • A. 

      Seniors have no closing costs

    • B. 

      Allows qualified borrowers to live for the rest of their lives in a home while receiving extra money

    • C. 

      Reverse mortgages are inexpensive loans

    • D. 

      Does not affect eligibility for some need-based programs such as Medicaid

    • E. 

      Reverse mortgage payments received are tax free

  • 7. 
    CWMC Module 22 Mortgages covers strategies that will help consumers select the best mortgage and ______________.
    • A. 

      Avoid mortgage scams

    • B. 

      Show the advantages of buying used furniture for the new home

    • C. 

      Trust the loan process today

    • D. 

      Learn the cheapest place to purchase a home

    • E. 

      All of the above

  • 8. 
    Select the best description of a sub-prime loan:
    • A. 

      Only offered to minorities

    • B. 

      Offered to lower-income borrowers with “spotty” credit records

    • C. 

      Not offered by Freddie Mac or Fannie Mae

    • D. 

      Only offered as second mortgages

    • E. 

      None of the above are even close

  • 9. 
    Which of the following is generally included on a home appraisal report?
    • A. 

      Cost to replace the appliances

    • B. 

      Comparable pricing of other real estate properties in the area

    • C. 

      Estimate of cost to replace a leaky roof

    • D. 

      An opinion of the decor

    • E. 

      How easy the home will be to sell

  • 10. 
    To secure the lowest interest rate on a mortgage, which of the following is the most important issue to the lender?
    • A. 

      How many people will live in the house

    • B. 

      Total liabilities

    • C. 

      FICO score

    • D. 

      Home location

    • E. 

      How much insurance the buyer will put on the home

  • 11. 
    Select the type of real estate loan that carries the highest interest rate:
    • A. 

      Prime loan

    • B. 

      Alt/A loan

    • C. 

      Title loan

    • D. 

      Sub-prime loan

    • E. 

      VA loan

  • 12. 
    The best reason to refinance a home mortgage is to:
    • A. 

      Obtain a lower interest rate

    • B. 

      Borrow the equity to buy a new car

    • C. 

      Borrow the equity to pay for college

    • D. 

      Increase the length of the loan

    • E. 

      All of the above are good reasons

  • 13. 
    "ARM" is the abbreviation for which of the following terms?
    • A. 

      Alternative Rate Mortgage

    • B. 

      Advantage Reverse Mortgage

    • C. 

      Adjustable Rate Mortgage

    • D. 

      Adjustable Rising Mortgage

    • E. 

      None of the above

  • 14. 
    What is the most important thing to do if a mortgage payment cannot be made?
    • A. 

      Prepare to put the house up for sale

    • B. 

      Work an additional job

    • C. 

      Make payments with a credit card

    • D. 

      Ignore all collection calls

    • E. 

      Call the lender immediately