HUD HOUSING COUNSELOR CERTIFICATION: KNOWLEDGE CHECK 2.2 |
100% VERIFIED QUESTIONS AND CORRECT ANSWERS | LATEST UPDATED
2026
Q: What are closing costs?
ANSWER Fees for final property transfer that are not included in the property
price, such as loan origination fees, appraisal fees, and title insurance.
Q: What is the typical range for closing costs?
ANSWER They often range from 3% to 4% of the home's purchase price,
though they can vary based on location and loan type.
Q: How do interest-only mortgages function?
ANSWER They allow borrowers to pay only the interest for a fixed term,
resulting in lower monthly payments during that period.
Q: What is a primary risk of an interest-only mortgage?
ANSWER The principal balance remains the same if only interest is paid, and
expected income increases may not happen.
Q: What defines a conventional mortgage loan?
ANSWER It is the most common mortgage type, backed by private lenders,
and available in conforming or non-conforming (jumbo) amounts.
, Q: Who is an ideal candidate for a conventional mortgage?
ANSWER Someone with a good credit history, funds for a 20% down
payment, and stable income.
Q: What are subprime mortgage loans?
ANSWER Mortgages with less stringent underwriting terms offered to
borrowers with blemished or limited credit histories.
Q: Why do subprime loans have higher interest rates?
ANSWER To compensate for the increased credit risk associated with the
borrower.
Q: What is the most common government-insured mortgage product?
ANSWER The 30-year fixed-rate mortgage.
Q: What is the role of the Federal Housing Administration (FHA)?
ANSWER It provides mortgage insurance on loans made by private FHA-
approved lenders to help those with limited funds or lower credit.
Q: Who is eligible for a VA loan?
ANSWER Eligible veterans, active-duty personnel, and surviving spouses with
a valid Certificate of Eligibility.
Q: What are the benefits of a VA loan?
ANSWER They offer competitive rates and often require low or no down
payments.
Q: What is a USDA loan?
ANSWER A loan guaranteed or issued by the USDA for homebuyers
interested in living in eligible rural areas.
100% VERIFIED QUESTIONS AND CORRECT ANSWERS | LATEST UPDATED
2026
Q: What are closing costs?
ANSWER Fees for final property transfer that are not included in the property
price, such as loan origination fees, appraisal fees, and title insurance.
Q: What is the typical range for closing costs?
ANSWER They often range from 3% to 4% of the home's purchase price,
though they can vary based on location and loan type.
Q: How do interest-only mortgages function?
ANSWER They allow borrowers to pay only the interest for a fixed term,
resulting in lower monthly payments during that period.
Q: What is a primary risk of an interest-only mortgage?
ANSWER The principal balance remains the same if only interest is paid, and
expected income increases may not happen.
Q: What defines a conventional mortgage loan?
ANSWER It is the most common mortgage type, backed by private lenders,
and available in conforming or non-conforming (jumbo) amounts.
, Q: Who is an ideal candidate for a conventional mortgage?
ANSWER Someone with a good credit history, funds for a 20% down
payment, and stable income.
Q: What are subprime mortgage loans?
ANSWER Mortgages with less stringent underwriting terms offered to
borrowers with blemished or limited credit histories.
Q: Why do subprime loans have higher interest rates?
ANSWER To compensate for the increased credit risk associated with the
borrower.
Q: What is the most common government-insured mortgage product?
ANSWER The 30-year fixed-rate mortgage.
Q: What is the role of the Federal Housing Administration (FHA)?
ANSWER It provides mortgage insurance on loans made by private FHA-
approved lenders to help those with limited funds or lower credit.
Q: Who is eligible for a VA loan?
ANSWER Eligible veterans, active-duty personnel, and surviving spouses with
a valid Certificate of Eligibility.
Q: What are the benefits of a VA loan?
ANSWER They offer competitive rates and often require low or no down
payments.
Q: What is a USDA loan?
ANSWER A loan guaranteed or issued by the USDA for homebuyers
interested in living in eligible rural areas.
