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ABA CTFA Exam
Certified Trust and Financial Advisor (CTFA) (Page 46 )

Updated On: 26-Jan-2026
Page 18 of 91
PDF with 895 Questions

acronym is that refers to a mortgage payment including stipulated portions of principal, interest, property, taxes and homeowner's insurance.

  1. PITI
  2. Homeowner insurance
  3. ABI
  4. DITI

Answer(s): A



It is the process of arranging with a mortgage lender, in advance of buying a home, to obtain the amount of mortgage financing the lender deems affordable to home buyer.

  1. Multiple listing service
  2. Prequalification
  3. Earnest money deposit
  4. Contingency clause

Answer(s): B



Debit card is a card use to make transactions for cash rather than credit; replaces the need for cash or checks by initiating charges against the checking account. Its big disadvantage is that:

  1. It does provide line of credit
  2. It does not provide line of credit
  3. Repaying of cash process is complicated
  4. Merchants may even charge you for just using your credit cards

Answer(s): A



Margin on an adjustable rate mortgage is the percentage point a lender adds to the index rate to determine the rate of interest. It is important for home buyers to understand all of the following basic features of an ARM Except:

  1. Adjustment period
  2. Index rate
  3. Payment caps
  4. Marginal rate of return

Answer(s): D



Two-step ARM is an adjustable rate mortgage with just two interest rates. One for the first years of the loan and the higher one for the remaining term of the loan:

  1. 5 years
  2. 6 years
  3. 5 to 7 years
  4. 3 years

Answer(s): C



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