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43 Cards in this Set
- Front
- Back
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With regard to adjustable loans with interest rate caps, it is true that: |
Cv The cap period is always one year The cap is lower when the adjustment period is longer The loan payments can go up when the index plus the margin is less than the rate the borrower has been paying before the adjustment The new interest rate cannot exceed the rate ceiling established by the caps The answer is The new interest rate cannot exceed the rate ceiling established by the caps. When the rate is reset, the index plus the margin cannot exceed the maximum allowable rate which is determined by adding the periodic cap to the current rate.
The cap period is identical to the adjustment period, and does not always equal one year. The cap would be higher when the adjustment period is longer, as the lender cannot make changes as frequently. |
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Which of the following would not be on a promissory note? |
Amount owed Rate of interest and whether the loan is fixed or adjustable Borrower's Social Security Number Loan terms The answer is borrower's Social Security Number. In the typical real estate sales transaction, the seller gives the buyer a deed at closing and the buyer gives the lender a promissory note and a security instrument (i.e., a mortgage or trust deed) that creates a lien on the property. The promissory note is both a promise to repay the money borrowed with interest and evidence of the debt. It shows the payor and payee, amount owed, rate of interest and whether the loan is fixed or adjustable, due dates for payment, and the loan terms. |
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Which of the following situations would constitute a kickback as defined in the Real Estate Settlement Procedures Act? |
A mortgage loan originator pays for a borrower's appraisal because the borrower is the mortgage loan originator's sister A builder offers clients a free three-car garage if they use the builder's mortgage company for financing A mortgage loan originator sends a borrower a $250 gift certificate to thank them for doing business with the mortgage loan originator A title company sends a mortgage loan originator a $25 gift certificate, because of the business the loan originator sends the title company The answer is a title company sends a mortgage loan originator a $25 gift certificate, because of the business the loan originator sends the title company. Under Section 8 of RESPA, it is illegal to give or accept any fee, kickback, or other thing of value under any agreement or understanding, oral or otherwise, that business relating to or part of a settlement service involving a federally-related mortgage loan will be referred to any person. A business entity may not pay any other business entity, or the employees of any other business entity, for the referral of real estate settlement service business. Therefore, a title company that sends a mortgage loan originator a gift certificate because of the business the loan originator sends the title company would be guilty of a kickback in violation of RESPA. |
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Which of the following is not among the initial disclosures that must currently be provided to a mortgage loan applicant? |
Notice of Right to Cancel Mortgage Servicing Disclosure Loan Estimate Special Information Booklet The answer is Notice of Right to Cancel. While the Loan Estimate, Mortgage Servicing Disclosure, and Special Information Booklet are all among the initial disclosures that must be delivered to a mortgage loan applicant, the Notice of Right to Cancel is provided at closing. |
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Advertising an attractive interest rate that a mortgage professional is not at liberty to offer is a major ethical offense and a violation of: |
Regulation Z The Equal Credit Opportunity Act Regulation X The Fair Credit Reporting Act The answer is Regulation Z. Under the requirements of Regulation Z, an ad may state specific credit terms only if those terms actually are or will be arranged or offered to the consumer. Bait-and-switch credit promotions are not allowed. These involve advertising a loan at very attractive terms and then informing potential customers that, while the advertised loan is not available, a substitute is. |
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Which of the following does not appear in the Loan Estimate? |
The anticipated ARM rates for the first five years The loan term Whether the subject loan is assumable The property purchase price The answer is the anticipated ARM rates for the first five years. In the heading of the Loan Estimate, the licensee must indicate the property address and its sale price, as well as the loan’s term. The Other Considerations table provides the applicant with information on appraisals, the homeowner's insurance requirement, the lender’s late payment policy, loan servicing information, and whether the loan may be assumed or refinanced. Anticipated ARM rates for the first five years of the loan are not disclosed, although the total the applicant will have paid in principal, interest, mortgage insurance, and loan costs for that time period is, in the Comparisons table |
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Your borrower does not wish to complete the demographics questions in the Government Monitoring section of the 1003. What should you do? |
Complete the section based on a visual observation of the borrower during a face-to-face application Leave the section blank Tell the borrower his/her loan cannot be funded until the information is obtained Refuse to take the application The answer is complete the section based on a visual observation of the borrower during a face-to-face application. The section titled “Information for Government Monitoring Purposes” is required by the Home Mortgage Disclosure Act to aid the federal government in monitoring compliance with ECOA. Because supplying this information is strictly voluntary, an applicant who does not wish to do so should check the box provided to indicate his/her decision. When an applicant does not provide this information, an originator taking the application on a face-to-face basis must note the applicant’s sex, race, and ethnicity on the form, based on his/her visual observation and/or the applicant’s surname. |
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Your borrower does not wish to complete the demographics questions in the Government Monitoring section of the 1003. What should you do? |
Complete the section based on a visual observation of the borrower during a face-to-face application Leave the section blank Tell the borrower his/her loan cannot be funded until the information is obtained Refuse to take the application The answer is complete the section based on a visual observation of the borrower during a face-to-face application. The section titled “Information for Government Monitoring Purposes” is required by the Home Mortgage Disclosure Act to aid the federal government in monitoring compliance with ECOA. Because supplying this information is strictly voluntary, an applicant who does not wish to do so should check the box provided to indicate his/her decision. When an applicant does not provide this information, an originator taking the application on a face-to-face basis must note the applicant’s sex, race, and ethnicity on the form, based on his/her visual observation and/or the applicant’s surname. |
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When would it be ethical for a mortgage broker to offer a loan with a rate higher than the best rate available to the borrower? |
Never Only when the borrower is unaware and will likely not know If the lender agrees to subsidize the broker fee If the borrower chooses the rate and plans to use the additional premium to offset closing costs The answer is if the borrower chooses the rate and plans to use the additional premium to offset closing costs. While a licensee is ethically obligated to offer borrowers the best rates available to them, the concept of suitability emphasizes that the licensee must make a conscientious effort to ascertain and understand all relevant circumstances surrounding the client, and take these circumstances into account. This may include suggesting loan products that might not initially seem to be the best option, but effectively serve a particular borrower’s circumstances. |
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A purpose of the Home Mortgage Disclosure Act (HMDA) is to |
Identify possible discriminatory lending patterns Ensure that prices of homes are fairly quoted Help lenders decide on mortgage interest rates Provide borrowers with property listings and their prices The answer is identify possible discriminatory lending patterns. The HMDA was enacted because of credit shortages in certain urban neighborhoods and the failure of some financial institutions to provide adequate home financing to qualified applicants on reasonable terms and conditions. Its main purpose is to provide the public with information about how well financial institutions are meeting the credit needs of the people in the neighborhoods and communities they serve; aid public officials in targeting public investments so as to attract investments from the private sector; and allow for the public to determine possible discriminatory lending patterns and to assist in enforcing laws against discrimination. |
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Under which of the following circumstances would flood insurance be required? |
Property is within 100 yards of a body of water Property is in flood zone "X" Property is in flood zone "A" Property is at or below sea level The answer is property is in flood zone "A". Flood insurance is required for property improvements located in an SFHA Zone A (an area subject to inundation by a 1%-annual-chance flood event) or a Zone V (an area along the coast subject to inundation by a 1%-annual-chance flood event with additional hazards associated with storm-induced waves). |
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The S.A.F.E. Act creates several consumer protection provisions. Which of the following is not a provision created through the enactment of the S.A.F.E. Act? |
Encourages responsible behavior through licensing standards Provides consumers access to information about originators Allows consumers a full refund if the originator is found to have engaged in unethical acts Facilitates collection and distribution of consumer complaints between regulators The answer is allows consumers a full refund if the originator is found to have engaged in unethical acts. The S.A.F.E. Act includes provisions to enhance professional standards within the mortgage industry by imposing licensing requirements, providing consumers access to information about licensees at no charge through its online registry, and facilitating the collection and disbursement of consumer complaints on behalf of state and federal mortgage regulators. While the S.A.F.E. Act does have provisions ensuring compensation to victims of mortgage law violations, it does not guarantee such consumers a full refund in all cases of unethical conduct. |
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In an FHA loan, which of the following is true regarding the upfront mortgage insurance premium (UFMIP)? |
A portion of it may be applied to the UFMIP of another FHA-insured mortgage It is refundable It is pertinent to only a small minority of FHA loans It takes the place of the annual mortgage insurance premium The answer is a portion of it may be applied to the UFMIP of another FHA-insured mortgage. The FHA funds the insurance from a mortgage insurance premium (MIP) charged to the borrower. Most FHA mortgages require payment of an upfront mortgage insurance premium (UFMIP). The UFMIP is nonrefundable, except to the extent that a portion may be applied to the UFMIP of another FHA-insured mortgage within three years. In addition, most FHA loans require payment of an annual mortgage insurance premium, payable monthly as part of the mortgage payment. This premium is based on the loan program, the loan term, and the LTV. |
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Every month, a borrower has a car payment of $350, a credit card payment of $50, HOA dues of $35, a cable bill of $40, and a house payment (including taxes and insurance) of $1,250. The borrower's annual income is $50,000. What is the borrower's front-end debt-to-income ratio? |
41.4% 30% 40.4% 30.8% The answer is 30.8%. A housing or front-end ratio compares the applicant’s monthly housing costs to his/her gross monthly income. Housing costs are referred to as PITI (principal, interest, taxes, insurance). In addition to PITI, any monthly homeowners’ association (HOA) dues, if applicable, would also be included because they are a housing-related debt. Non-housing-related expenses (car payments, credit cards, etc.) are not included in the housing ratio. Housing ratio = housing debts divided by gross monthly income. In this case, $50,000÷12 = $4,166.66. ($1,250+$35)÷$4,166.66 = 0.308 = 30.8%. |
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Every month, a borrower has a car payment of $350, a credit card payment of $50, HOA dues of $35, a cable bill of $40, and a house payment (including taxes and insurance) of $1,250. The borrower's annual income is $50,000. What is the borrower's front-end debt-to-income ratio? |
41.4% 30% 40.4% 30.8% The answer is 30.8%. A housing or front-end ratio compares the applicant’s monthly housing costs to his/her gross monthly income. Housing costs are referred to as PITI (principal, interest, taxes, insurance). In addition to PITI, any monthly homeowners’ association (HOA) dues, if applicable, would also be included because they are a housing-related debt. Non-housing-related expenses (car payments, credit cards, etc.) are not included in the housing ratio. Housing ratio = housing debts divided by gross monthly income. In this case, $50,000÷12 = $4,166.66. ($1,250+$35)÷$4,166.66 = 0.308 = 30.8%. |
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For which of the following reasons may a state deny an application for licensure? |
The applicant had an insurance license in another state that wasn't renewed two years prior to application The applicant has current outstanding judgments as a result of medical expenses The applicant was convicted of vandalism eight years prior to application The applicant had a property foreclosed two years prior to application The answer is the applicant had a property foreclosed two years prior to application. In order for a state to approve a license application, the applicant must show that he/she has not been convicted of, or pled guilty or nolo contendere to, any felony in any court during the seven-year period preceding the date of the application; or at any time if the felony involved an act of fraud, dishonesty, or a breach of trust or money laundering. Indications of financial irresponsibility include bankruptcy or pattern of bankruptcies, a foreclosure within the past three years, any unpaid judgments (other than those relating to medical expenses), tax or other government liens, or a pattern of paying creditors late. |
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Which of the following would not be considered a settlement service? |
Servicing Escrow services Origination services Appraisal services The answer is servicing. Settlement services include a variety of services related to the origination, processing, or funding of a loan, including, among others, rendering credit reports and appraisals, and conducting settlement by a settlement agent (e.g., the originating lender, an attorney, or a licensed escrow agent) and any related services. They do not include loan servicing. |
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Every month, a borrower has a car payment of $350, a credit card payment of $50, HOA dues of $35, a cable bill of $40, and a house payment (including taxes and insurance) of $1,250. The borrower's annual income is $50,000. What is the borrower's front-end debt-to-income ratio? |
41.4% 30% 40.4% 30.8% The answer is 30.8%. A housing or front-end ratio compares the applicant’s monthly housing costs to his/her gross monthly income. Housing costs are referred to as PITI (principal, interest, taxes, insurance). In addition to PITI, any monthly homeowners’ association (HOA) dues, if applicable, would also be included because they are a housing-related debt. Non-housing-related expenses (car payments, credit cards, etc.) are not included in the housing ratio. Housing ratio = housing debts divided by gross monthly income. In this case, $50,000÷12 = $4,166.66. ($1,250+$35)÷$4,166.66 = 0.308 = 30.8%. |
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For which of the following reasons may a state deny an application for licensure? |
The applicant had an insurance license in another state that wasn't renewed two years prior to application The applicant has current outstanding judgments as a result of medical expenses The applicant was convicted of vandalism eight years prior to application The applicant had a property foreclosed two years prior to application The answer is the applicant had a property foreclosed two years prior to application. In order for a state to approve a license application, the applicant must show that he/she has not been convicted of, or pled guilty or nolo contendere to, any felony in any court during the seven-year period preceding the date of the application; or at any time if the felony involved an act of fraud, dishonesty, or a breach of trust or money laundering. Indications of financial irresponsibility include bankruptcy or pattern of bankruptcies, a foreclosure within the past three years, any unpaid judgments (other than those relating to medical expenses), tax or other government liens, or a pattern of paying creditors late. |
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Which of the following would not be considered a settlement service? |
Servicing Escrow services Origination services Appraisal services The answer is servicing. Settlement services include a variety of services related to the origination, processing, or funding of a loan, including, among others, rendering credit reports and appraisals, and conducting settlement by a settlement agent (e.g., the originating lender, an attorney, or a licensed escrow agent) and any related services. They do not include loan servicing. |
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When must a borrower receive notice of whether loan servicing can be assigned, sold, or transferred? |
Never - this disclosure is not required Within 30 days of the transfer of servicing Within 15 days of the transfer of servicing Either at the time of application or within three business days of application The answer is either at the time of application or within three business days of application. A mortgage servicing disclosure statement discloses whether the servicing of the loan (i.e., collection of payments) may be assigned, sold, or transferred to any other person at any time while the loan is outstanding. It must be delivered to the borrower at application or within three business days |
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Every month, a borrower has a car payment of $350, a credit card payment of $50, HOA dues of $35, a cable bill of $40, and a house payment (including taxes and insurance) of $1,250. The borrower's annual income is $50,000. What is the borrower's front-end debt-to-income ratio? |
41.4% 30% 40.4% 30.8% The answer is 30.8%. A housing or front-end ratio compares the applicant’s monthly housing costs to his/her gross monthly income. Housing costs are referred to as PITI (principal, interest, taxes, insurance). In addition to PITI, any monthly homeowners’ association (HOA) dues, if applicable, would also be included because they are a housing-related debt. Non-housing-related expenses (car payments, credit cards, etc.) are not included in the housing ratio. Housing ratio = housing debts divided by gross monthly income. In this case, $50,000÷12 = $4,166.66. ($1,250+$35)÷$4,166.66 = 0.308 = 30.8%. |
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For which of the following reasons may a state deny an application for licensure? |
The applicant had an insurance license in another state that wasn't renewed two years prior to application The applicant has current outstanding judgments as a result of medical expenses The applicant was convicted of vandalism eight years prior to application The applicant had a property foreclosed two years prior to application The answer is the applicant had a property foreclosed two years prior to application. In order for a state to approve a license application, the applicant must show that he/she has not been convicted of, or pled guilty or nolo contendere to, any felony in any court during the seven-year period preceding the date of the application; or at any time if the felony involved an act of fraud, dishonesty, or a breach of trust or money laundering. Indications of financial irresponsibility include bankruptcy or pattern of bankruptcies, a foreclosure within the past three years, any unpaid judgments (other than those relating to medical expenses), tax or other government liens, or a pattern of paying creditors late. |
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Which of the following would not be considered a settlement service? |
Servicing Escrow services Origination services Appraisal services The answer is servicing. Settlement services include a variety of services related to the origination, processing, or funding of a loan, including, among others, rendering credit reports and appraisals, and conducting settlement by a settlement agent (e.g., the originating lender, an attorney, or a licensed escrow agent) and any related services. They do not include loan servicing. |
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When must a borrower receive notice of whether loan servicing can be assigned, sold, or transferred? |
Never - this disclosure is not required Within 30 days of the transfer of servicing Within 15 days of the transfer of servicing Either at the time of application or within three business days of application The answer is either at the time of application or within three business days of application. A mortgage servicing disclosure statement discloses whether the servicing of the loan (i.e., collection of payments) may be assigned, sold, or transferred to any other person at any time while the loan is outstanding. It must be delivered to the borrower at application or within three business days |
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According to fair lending laws, age may be considered as a factor in denying a loan application if: |
The applicant is too young or too old to understand the terms of the contract The applicant is too old to survive the term of the loan The applicant is too young to have accumulated savings and requires a gift from his/her parents in order to make a down payment A creditor cannot legally discriminate against an applicant in any aspect of a credit transaction on the basis of age, provided that the applicant is of age to enter into a contract The answer is a creditor cannot legally discriminate against an applicant in any aspect of a credit transaction on the basis of age, provided that the applicant is of age to enter into a contract. The Equal Credit Opportunity Act (ECOA) prohibits discrimination on the basis of age against a loan applicant who is of age to enter into contracts |
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Lucy closes a refinance on Betty's primary residence. However, Lucy forgets to provide Betty with the proper notice of rescission rights. Which of the following is true? |
The transaction is rescindable at any time during the life of the loan The transaction is void and should be cancelled Betty can rescind for three years from recording Betty cannot rescind for three days following recording The answer is Betty can rescind for three years from recording. If the creditor has failed to provide the required disclosures and notice of the right of rescission, the rescission period may be extended up to the date of the first of the following: three years after the consummation of the transaction, transfer of all of the consumer’s interest in the property, or sale of the property |
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Which of the following best describes the benefit of mortgage insurance to the borrower? |
Reduced hazard insurance premiums Lower down payment requirements Mortgage insurance only benefits the lender Relaxed underwriting conditions The answer is lower down payment requirements. So that he/she may get a loan with a small down payment, a borrower pays a mortgage insurance premium either as a lump sum at closing covering the life of the loan, or by paying the first year's premium at closing and then paying annual premiums as part of the mortgage payment. The amount of the premium is a percentage of the loan amount based on the borrower's down payment |
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Which of the following best describes the benefit of mortgage insurance to the borrower? |
Reduced hazard insurance premiums Lower down payment requirements Mortgage insurance only benefits the lender Relaxed underwriting conditions The answer is lower down payment requirements. So that he/she may get a loan with a small down payment, a borrower pays a mortgage insurance premium either as a lump sum at closing covering the life of the loan, or by paying the first year's premium at closing and then paying annual premiums as part of the mortgage payment. The amount of the premium is a percentage of the loan amount based on the borrower's down payment |
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What two main aspects of a loan application does an underwriter examine to determine if lender guidelines are being met? |
Applicant and collateral Applicant and credit Credit and income Credit and collateral The answer is applicant and collateral. Underwriting is the process of deciding whether to make a loan based on credit, employment, assets, and other factors. To ensure that loans are marketable in the secondary market, the underwriter assesses the borrower’s ability and willingness to repay and the property’s ability to serve as collateral for the debt |
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Which of the following best describes the benefit of mortgage insurance to the borrower? |
Reduced hazard insurance premiums Lower down payment requirements Mortgage insurance only benefits the lender Relaxed underwriting conditions The answer is lower down payment requirements. So that he/she may get a loan with a small down payment, a borrower pays a mortgage insurance premium either as a lump sum at closing covering the life of the loan, or by paying the first year's premium at closing and then paying annual premiums as part of the mortgage payment. The amount of the premium is a percentage of the loan amount based on the borrower's down payment |
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What two main aspects of a loan application does an underwriter examine to determine if lender guidelines are being met? |
Applicant and collateral Applicant and credit Credit and income Credit and collateral The answer is applicant and collateral. Underwriting is the process of deciding whether to make a loan based on credit, employment, assets, and other factors. To ensure that loans are marketable in the secondary market, the underwriter assesses the borrower’s ability and willingness to repay and the property’s ability to serve as collateral for the debt |
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If a consumer contacts a mortgage company, for how long does the established business relationship exemption exist? |
Nine months Six months 24 months Three months The answer is three months. Under the Do-Not-Call-Act, a company engaging in telemarketing is prohibited from making interstate or intrastate calls to anyone whose number is listed on the Registry, unless an “established business relationship” exists. An established business relationship means a relationship between the company and a consumer based on the consumer’s purchase, rental, or lease of the seller’s goods or services or a financial transaction between the consumer and seller, within the 18 months immediately preceding the date of a telemarketing call. This may also include an inquiry or application regarding an offered product or service, within the three months (90 days) immediately preceding the date of a telemarketing call |
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Which of the following best describes the benefit of mortgage insurance to the borrower? |
Reduced hazard insurance premiums Lower down payment requirements Mortgage insurance only benefits the lender Relaxed underwriting conditions The answer is lower down payment requirements. So that he/she may get a loan with a small down payment, a borrower pays a mortgage insurance premium either as a lump sum at closing covering the life of the loan, or by paying the first year's premium at closing and then paying annual premiums as part of the mortgage payment. The amount of the premium is a percentage of the loan amount based on the borrower's down payment |
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What two main aspects of a loan application does an underwriter examine to determine if lender guidelines are being met? |
Applicant and collateral Applicant and credit Credit and income Credit and collateral The answer is applicant and collateral. Underwriting is the process of deciding whether to make a loan based on credit, employment, assets, and other factors. To ensure that loans are marketable in the secondary market, the underwriter assesses the borrower’s ability and willingness to repay and the property’s ability to serve as collateral for the debt |
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If a consumer contacts a mortgage company, for how long does the established business relationship exemption exist? |
Nine months Six months 24 months Three months The answer is three months. Under the Do-Not-Call-Act, a company engaging in telemarketing is prohibited from making interstate or intrastate calls to anyone whose number is listed on the Registry, unless an “established business relationship” exists. An established business relationship means a relationship between the company and a consumer based on the consumer’s purchase, rental, or lease of the seller’s goods or services or a financial transaction between the consumer and seller, within the 18 months immediately preceding the date of a telemarketing call. This may also include an inquiry or application regarding an offered product or service, within the three months (90 days) immediately preceding the date of a telemarketing call |
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Which of the following best describes the market approach to appraisal? |
A guarantee of value from the appraiser derived by using comparable sales of like properties An estimate of market value derived by comparing the subject property to similar properties which have sold A comparison of similar properties within two miles of the subject property An estimate of value using projected cash flow from the subject property The answer is an estimate of market value derived by comparing the subject property to similar properties which have sold. The market or market data approach, also called the sales comparison approach, bases the value of a property on the prices paid for similar, or comparable, properties in the area that have sold recently. It is the most reliable method for appraising single-family homes and land. |
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What is the maximum number of hours of continuing education that may be carried over from any given year to the next in order to meet requirements for license renewal? |
Up to four Up to eight Zero Up to sixteen The answer is zero. Continuing education hours are valid only for the year they are taken, and may not be carried over from year to year. |
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What is the maximum number of hours of continuing education that may be carried over from any given year to the next in order to meet requirements for license renewal? |
Up to four Up to eight Zero Up to sixteen The answer is zero. Continuing education hours are valid only for the year they are taken, and may not be carried over from year to year. |
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Which of the following terms applies to a VA mortgage? |
Certificate of eligibility Mortgage insurance certificate UFMIP Insuring fee The answer is certificate of eligibility. A VA loan is available only to veterans of the armed services, certain active and discharged military personnel, and their spouses; however, the loan is assumable by nonveterans. In order to obtain the loan, the applicant must obtain a certificate of eligibility from the VA (directly online, through the lender online, or by mail). This will determine whether an individual is eligible for a VA loan and whether he/she is eligible for a loan with the full guarantee. |
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What is the maximum number of hours of continuing education that may be carried over from any given year to the next in order to meet requirements for license renewal? |
Up to four Up to eight Zero Up to sixteen The answer is zero. Continuing education hours are valid only for the year they are taken, and may not be carried over from year to year. |
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Which of the following terms applies to a VA mortgage? |
Certificate of eligibility Mortgage insurance certificate UFMIP Insuring fee The answer is certificate of eligibility. A VA loan is available only to veterans of the armed services, certain active and discharged military personnel, and their spouses; however, the loan is assumable by nonveterans. In order to obtain the loan, the applicant must obtain a certificate of eligibility from the VA (directly online, through the lender online, or by mail). This will determine whether an individual is eligible for a VA loan and whether he/she is eligible for a loan with the full guarantee. |
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Richie Rich has been approved for a 90% loan. Richie is under contract to purchase a home for $400,000 and put $5,000 earnest money down with the contract. If Richie's lender is charging 1% origination, 1% discount, and the title company fees total $1,350, how much does Richie need to bring to closing? |
$49,350 $46,850 $43,550 $48,550 The answer is $43,550. 90% LTV means Richie will need to bring 10% of the purchase price, or $40,000, to closing, minus the $5,000 he already paid as earnest money. To this he must add 1% of the $360,000 loan amount, or $3,600, for the 1% origination fee, and an additional 1% of the loan amount ($3,600) for the discount. Finally, he must add the $1,350 title charge: $40,000 − $5,000 + $3,600 + $3,600 + $1,350 = $43,550 |
