Accredited Mortgage Professional (AMP) Practice Exam

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• Which financial document outlines the terms of a borrower’s mortgage loan?
• What is a 1031 exchange?
• What is the term used for when a lender requires a borrower to provide full financial disclosure?
• In the purchase of commercial property, investors may negotiate a nonrecourse loan, which means:
• What does it mean to "lock in" an interest rate?
• Which factors are most important in a mortgage lender's decision to approve a loan?
• What is a loan modification?
• What is required for a second lender to gain priority over the first lender in a mortgage case?
• What does the term "cash-out refinance" refer to?
• What is an adjustable-rate mortgage (ARM)?
• What does owner-occupied mean in terms of mortgage qualification?
• Which mortgage type is insured by the Federal Housing Administration (FHA)?
• A mortgage must include a power-of-sale clause to be foreclosed by?
• What is typically included in the closing costs for a mortgage?
• Which advantage is associated with becoming an Accredited Mortgage Professional (AMP)?
• What is the primary purpose of Private Mortgage Insurance (PMI)?
• What defines a subprime mortgage?
• What does APR stand for in mortgage lending?
• What does "underwater" mean in real estate?
• Why is it important to maintain a good mortgage payment history?
• What is a "hard money loan"?
• What is a deed of trust?
• The ratio of a property's net income to its initial investment is known as what?
• If an eligible veteran's offer on a home is contingent upon obtaining a VA-guaranteed loan, what may happen if the property's CRV is less than the offer?
• What is typically true about equity in a declining housing market?
• What is the owner's net worth in relation to a property, considering the market value and any liens?
• What is the primary benefit of a fixed-rate mortgage?
• What is a short sale in real estate?
• Which of the following components are included in a standard mortgage payment?
• What does the term "equity stripping" refer to?
• What is the primary goal of the National Mortgage Licensing System (NMLS)?
• If buyers have $12,000 for a down payment on a $120,000 property, which loan-to-value (LTV) ratio would they negotiate?
• What role does a real estate attorney play in the closing process?
• What is a mortgage broker?
• Which act prohibits companies from exploiting multiple employers for benefits?
• What type of mortgage guarantees the lender against a loss?
• What is one of the key advantages of using the secondary mortgage market?
• What is the primary purpose of RESPA?
• What is a principal reduction?
• What is typically included in a borrower's credit score?
• What type of mortgage allows a retired couple to negotiate a loan against the equity in their property and receive monthly checks for life?
• When a buyer assumes a mortgage, which statement is true?
• What is contained in a mortgage note?
• Which of the following requires finance charges to be stated as an annual percentage rate?
• A defaulted borrower's right to redeem property before a foreclosure is called the:
• What is a foreclosure?
• Which federal act prohibits discrimination by lenders based on various personal attributes including race and age?
• Which type of loan is MOST likely to create negative amortization?
• What is the role of the secondary mortgage market?
• Which funding mechanism is often used for FHA loans?
• Is advertising a 30-year fixed-rate mortgage with an APR of 6.35% in compliance with Regulation Z?
• What documentation is typically needed by lenders to process a home loan application?
• What can cause a change in the principal balance of a mortgage loan?
• What is a loan origination fee?
• What is the term for pledging property to a lender while retaining possession rights?
• What type of interest rate can a borrower expect on an adjustable-rate mortgage (ARM)?
• What is an escrow account?
• What is required for a veteran to restore their loan benefits after selling under an assumption?
• What is a key feature of construction loans?
• What is a USDA loan designed for?
• What is typically required for a conventional loan?
• What does the appraiser issue when a veteran is negotiating a GI loan?
• What is the difference between a lien and a mortgage?
• What is the main qualification for a borrower to obtain a reverse mortgage?
• How can a borrower avoid a prepayment penalty?
• Who has the authority to review a loan package and make the final decision on its approval?
• A mortgage instrument may include a clause that prevents the assumption of the mortgage by a new purchaser without the lender's consent. What is this clause called?
• Is it possible for a couple aged 70 years with no liens on their property to negotiate a loan without monthly payments?
• Which of the following best describes a package mortgage?
• What is the role of a closing agent?
• When is a mortgage assumption typically allowed?
• What is the term used when a borrower secures a guarantee from the lender that the interest rate quoted will not change before closing?
• What is often the result of being in an underwater mortgage situation?
• What term describes when a lender agrees to accept less than the current principal balance from a distressed homeowner?
• What does the term "title insurance" refer to?
• What is a real estate investment trust (REIT)?
• What happens when two lenders have liens on a property and the second lender is given priority?
• In an adjustable-rate mortgage, when does the interest rate change?
• What distinguishes a conventional loan from a government-backed loan?
• In a declining market scenario, what represents the sellers' contribution to the property value?
• A mortgage loan requiring monthly payments of $1,175.75 for 20 years with a final payment of $25,095 is classified as what type of mortgage?
• In the context of a VA loan, what does the VA do for qualified veterans purchasing property?
• What defines a debt collection policy?
• What does "appraisal contingency" mean?
• What distinguishes a fixed-rate mortgage from an adjustable-rate mortgage?
• What might trigger a loan estimate to be revised?
• The type of mortgage fraud involving an undisclosed loan made by the seller to assist with the down payment is called?
• What characterizes a securitized mortgage?
• What is the major difference between conventional and unconventional loans?
• Which federal law obliges loan originators to provide a Loan Estimate within three days of application?
• What does "seller financing" refer to?
• Which of the following loans typically has a higher interest rate due to increased risk?
• What is the purpose of a title search?
• What is the primary function of a mortgage note?
• What does "investment property" refer to?
• If a borrower has a 10% down payment and applies for a conventional loan, what is the lender most likely to require?
• What does underwriting risk refer to?
• What does a home equity line of credit (HELOC) leverage?
• The initial interest rate on an adjustable-rate mortgage is often:
• According to the Truth in Lending Act, what must a lender NOT disclose?
• What is the purpose of a mortgage commitment letter?
• What type of mortgage is a second mortgage that remains subordinate while the borrower makes a single monthly payment?
• In an FHA-insured loan transaction, who may pay the discount points?
• Who is the individual who obtains a real estate loan by signing a note and a mortgage?
• A buyer entering into a contract for deed typically discusses what type of ownership during the agreement?
• What does buyer's remorse in real estate typically represent?
• What is a fundamental responsibility of mortgage originators?
• What is the main purpose of a home inspection?
• Which of the following accurately defines a "loan to value" ratio?
• Which type of mortgage does not require a down payment?
• What does RESPA stand for?
• Which mortgage type is typically more expensive in terms of interest rates?
• What does a mortgage's amortization schedule indicate?
• What is one key benefit of an open-end mortgage?
• What does "default" mean concerning a mortgage?
• What is a mortgage that does not require mortgage insurance but may have a higher interest rate?
• How can seller concessions benefit buyers?
• Is it legal for brokers to decide not to show a discount broker's listings?
• What characterizes a contingent offer in real estate?
• What type of title does a buyer acquire when entering into a contract for deed?
• Who is the beneficiary in the deed of trust security instrument used in a title theory state?
• What type of mortgage includes both real and personal property?
• Which factor is NOT considered when determining a mortgage’s interest rate?
• A woman is qualified to obtain an FHA loan for the purchase of a new home. From which of the following may she obtain this loan?
• Which mortgage type is generally considered to have lower initial payments?
• What is one advantage of fixed-rate mortgages?
• What is a reverse mortgage?
• In a title theory state, the what takes title to the mortgaged property during the term of the mortgage?
• Which regulatory body oversees mortgage lending practices in the U.S.?
• What is the primary risk associated with adjustable-rate mortgages?
• What is the primary role of a mortgage servicer?
• In mortgage terms, what does "underwriting" refer to?
• What was the maximum conforming loan amount as of 2023?
• What is the primary purpose of the Truth in Lending Act (TILA)?
• What is the impact of a credit score on mortgage approval?
• What does "deed in lieu of foreclosure" entail?
• What is the purpose of loan segregation?
• What is a "walk-away" clause in a mortgage?
• Which of the following is considered a lien on real estate?
• Which governmental entity is responsible for creating money and regulating interest rates?
• What is a significant benefit of home ownership in terms of wealth?
• The defeasance clause in a mortgage requires that the mortgagee execute what?
• What type of mortgage is a VA-guaranteed loan considered to be?
• What kind of loan provides funds specifically for a property’s renovation?
• What is an Employment Verification?
• Which of the following is NOT considered a sign of possible mortgage fraud?
• What does a good faith deposit signify in a real estate transaction?
• What is underwriting in mortgage lending?
• What is the benefit of a bi-weekly mortgage payment plan?
• What are seller concessions in real estate transactions?
• In what scenario is a wrap-around mortgage most beneficial?
• Which statement is TRUE regarding a purchase money mortgage?
• On an adjustable-rate mortgage, the margin will:
• What is the significance of the loan estimate in the mortgage process?
• What does amortization refer to in the context of loans?
• What distinguishes an open mortgage from an open-end mortgage?
• What is a lease-option agreement?
• A construction loan is classified as what type of loan?
• What coverage does a VA mortgage provide to lenders?
• How can borrowers improve their credit score before applying for a mortgage?
• The act that requires lenders to inform buyers and sellers of all settlement fees and charges is known as:
• What might be a risk of using discount points?
• What is a balloon mortgage?
• Which of the following describes a mortgage that uses both real and personal property as security?
• What type of analysis does a credit bureau conduct to compute a borrower's credit score?
• What does PMI stand for in the context of mortgage insurance?
• What is equity in real estate?
• Who is required to sign both the note and the mortgage in a loan agreement?
• What market are both Fannie Mae and Ginnie Mae involved in?
• What is a pre-approval in mortgage lending?
• What is the purpose of the Good Faith Estimate (GFE)?
• How does inflation typically impact mortgage rates?
• What is a wrap-around mortgage?
• How is the loan-to-value (LTV) ratio calculated?
• What is a title disruption?
• In determining whether to extend a loan, lending institutions are most likely to place the greatest importance on the:
• What typically occurs when a borrower has a higher credit score?
• What is "loan stacking"?
• When a loan is secured by property, and if the borrower fails to make payments, what could the lender initiate?
• Laws that determine the maximum interest rate a lender can charge are called:
• What is a home equity loan?
• If a lender allows an old note and mortgage to be substituted with a new one in the buyer's name, this is known as?
• What is a comparative market analysis (CMA)?
• Which document outlines the terms of a mortgage agreement?
• What is the main difference between a credit report and a credit score?
• What role does the certificate of reasonable value play in a GI loan?
• In many states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain the property. What is the right called?
• What is a loan estimate?
• What is the clause in a note, mortgage, or trust deed that permits a lender to declare the entire unpaid sum due should the borrower default?
• What type of mortgage allows for properties to be purchased with minimal down payments and lower credit scores?
• What regulation provides the owner's right to rescind a home equity loan agreement within three days?
• Can parties release one another from a contract if circumstances change before a closing?
• What is a credit freeze?
• What does the term "marketability" refer to in real estate?
• What does the debt snowball method focus on?
• What determines the interest rate on a mortgage loan?
• What type of loan are high-risk borrowers MOST likely to negotiate?
• What does a "wrap-around mortgage" enable?
• What is the primary purpose of a down payment?
• What is mortgage fraud?
• Which of the following is NOT a way that a borrower may default on a loan?
• What are discount points?
• What is a buyer's agent?
• What does "zoning" mean in real estate?
• What does mortgage rate fluctuation refer to?
• What is a prepayment penalty?
• What is the loan-to-value (LTV) ratio indicative of?
• What could enhance a buyer's ability to obtain a mortgage loan?
• What is the function of an appraisal in the mortgage process?
• What type of mortgage allows the borrower to make lower payments initially that will increase after a set period?
• What does the term "escrow" refer to in relation to mortgages?
• What does the statutory right of redemption allow a borrower to do?
• What type of loan requires a borrower to have no monthly payments?
• Which loans does Regulation Z apply to?
• What is the maximum loan-to-value (LTV) ratio for a conventional loan?
• Which of the following is NOT a typical feature of a reverse mortgage?
• What is the purpose of a closing disclosure?
• What occurs during a foreclosure auction?
• A developer placed a mortgage on his housing development. The mortgage the developer obtained was:
• An escrow account for taxes and insurance is commonly referred to as what type of mortgage?
• What does the DTI ratio measure?
• A person who is paid to use someone else's identification to obtain a loan is referred to as?
• What determines the total amount of equity in a property?
• Which loan type is specifically designed for veterans and sometimes active military personnel?
• A deficiency judgment can be filed when which of the following occurs?
• What is an FHA loan?
• What distinguishes a mortgage banker from a mortgage broker?
• Which of the following types of loans is typically used for purchasing homes?
• Which of the following describes a mortgage that requires principal and interest payments at regular intervals until the debt is satisfied?
• What is the purpose of asset verification in mortgage applications?
• What is the primary goal of fair lending laws?
• How is a short term loan generally defined?
• What is a contract for deed?
• What is a construction loan?