Unit 13 of 19

Types of mortgages and sources of financing

Conventional, FHA, VA, and other loan types, the primary and secondary mortgage markets, and creative financing.

  1. 1
    Conventional loans and private mortgage insurance
    What makes a loan conventional, the difference between conforming and nonconforming (jumbo) loans, and when private mortgage insurance must be cancelled or ends under the federal Homeowners Protection Act.
    +50 XP
  2. 2
    Government-backed loans: FHA, VA, and USDA
    How FHA insurance, the VA guaranty and the USDA guaranteed rural loan work, including FHA's 3.5% minimum down payment and mortgage insurance premiums, the VA funding fee and certificate of eligibility, and who can use each program.
    +50 XP
  3. 3
    Fixed and adjustable rates, and qualifying ratios
    How fixed-rate and adjustable-rate mortgages differ, how an ARM's index, margin and rate caps set the new rate, and how lenders use housing and debt-to-income ratios to size a loan.
    +50 XP
  4. 4
    Other mortgage structures and creative financing
    Package, blanket, construction, open-end, wraparound, purchase-money and reverse (HECM) mortgages, plus seller financing, and how to spot each one in an exam question.
    +50 XP
  5. 5
    The primary and secondary mortgage markets
    Who makes mortgage loans in the primary market, how Fannie Mae and Freddie Mac buy loans in the secondary market, and how Ginnie Mae guarantees securities backed by FHA, VA and USDA loans.
    +50 XP

Practice questions

Check yourself with exam-style questions. Each one explains the answer as soon as you pick.

Practice Unit 13