HECM Practice Guide
1. HECM Saver Premium
Q: The HECM Saver was introduced as an option to lower the upfront cost of
a HECM by reducing the upfront mortgage insurance premium to:
A: b. 0.01% of the Maximum Claim Amount
2. Repair Set-Aside Amount
Q: If repairs are required but can be completed after closing, the lender will
create a repair set-aside in the amount of:
A: d. 150% of the estimated cost of repairs
3. TALC Rates and Longevity
Q: TALC rates generally are greatest when borrowers live:
A: a. Less than their life expectancies
4. Net Principal Limit at Closing
Q: The net principal limit at closing is:
A: b. The credit remaining after all set-asides and fees have been deducted
5. Principal Limit with Younger Spouse Removed
Q: If Mrs. Martin (65) is removed from the title and Mr. Martin is 83, the
HECM principal limit would be:
A: c. Larger
6. Payment Type Requirement (T/F)
Q: Most lenders require lump sum with adjustable rate and only allow a
creditline with a fixed rate.
A: False
, 7. Term vs Tenure Payments (T/F)
Q: A term payment plan provides larger monthly payments than a tenure
plan (given the same principal limit).
A: True
8. HECM Term Advances
Q: Term advances:
A: a. Are generally larger than tenure advances
9. Best Plan for Short-Term Needs
Q: Which plan suits someone needing monthly income for a short time and
borrowing later?
A: c. Modified Term
10. Definition of Forward Mortgage
Q: A forward mortgage is a loan where:
A: b. Payments are made regularly, reducing debt and building equity
11. Proprietary Reverse Mortgage Facts
Q: Which is true about proprietary reverse mortgages?
A: d. All of the above
12. Eligibility with Younger Spouse
Q: When could a 75-year-old married to a 55-year-old be eligible for a HECM?
A: b. Only if the 55-year-old is not an owner of the home
13. Equity Trend in Reverse Mortgage
Q: A reverse mortgage usually results in:
A: b. Increasing debt and decreasing equity
1. HECM Saver Premium
Q: The HECM Saver was introduced as an option to lower the upfront cost of
a HECM by reducing the upfront mortgage insurance premium to:
A: b. 0.01% of the Maximum Claim Amount
2. Repair Set-Aside Amount
Q: If repairs are required but can be completed after closing, the lender will
create a repair set-aside in the amount of:
A: d. 150% of the estimated cost of repairs
3. TALC Rates and Longevity
Q: TALC rates generally are greatest when borrowers live:
A: a. Less than their life expectancies
4. Net Principal Limit at Closing
Q: The net principal limit at closing is:
A: b. The credit remaining after all set-asides and fees have been deducted
5. Principal Limit with Younger Spouse Removed
Q: If Mrs. Martin (65) is removed from the title and Mr. Martin is 83, the
HECM principal limit would be:
A: c. Larger
6. Payment Type Requirement (T/F)
Q: Most lenders require lump sum with adjustable rate and only allow a
creditline with a fixed rate.
A: False
, 7. Term vs Tenure Payments (T/F)
Q: A term payment plan provides larger monthly payments than a tenure
plan (given the same principal limit).
A: True
8. HECM Term Advances
Q: Term advances:
A: a. Are generally larger than tenure advances
9. Best Plan for Short-Term Needs
Q: Which plan suits someone needing monthly income for a short time and
borrowing later?
A: c. Modified Term
10. Definition of Forward Mortgage
Q: A forward mortgage is a loan where:
A: b. Payments are made regularly, reducing debt and building equity
11. Proprietary Reverse Mortgage Facts
Q: Which is true about proprietary reverse mortgages?
A: d. All of the above
12. Eligibility with Younger Spouse
Q: When could a 75-year-old married to a 55-year-old be eligible for a HECM?
A: b. Only if the 55-year-old is not an owner of the home
13. Equity Trend in Reverse Mortgage
Q: A reverse mortgage usually results in:
A: b. Increasing debt and decreasing equity
