HUD housing counselor Test question and || || || || ||
Correct detailed answers
|| || ||
Which document is most important when working with a client to develop an initial budget as part
|| || || || || || || || || || || || || || || ||
of a Client Action Plan? - ✔✔Pay Stub
|| || || || || || || ||
A client would like to purchase a home within one year. The client is motivated to increase
|| || || || || || || || || || || || || || || || ||
household income as a way to save for a down payment and qualify for a loan. Which is the
|| || || || || || || || || || || || || || || || || ||
best solution for the client to reach this goal? - ✔✔Find a second job
|| || || || || || || || || || || || ||
A credit report may contain which information? - ✔✔The number of accounts in collection status
|| || || || || || || || || || || || || ||
Six months ago a client left a job as a reporter to start a
|| || || || || || || || || || || || ||
business in the retail industry. To prepare to buy a house, the client closed credit card accounts
|| || || || || || || || || || || || || || || || ||
and has been using savings to
|| || || || ||
pay down credit card debt and collections. The client has not
|| || || || || || || || || ||
been able to save much for a down payment with all the debt
|| || || || || || || || || || || ||
payments but knows about an affordable homeownership || || || || || ||
program that only requires a 1% down payment with an FHA
|| || || || || || || || || ||
loan. What might result from the client closing the credit card
|| || || || || || || || || ||
accounts? - ✔✔It increases credit utilization, causing a negative impact on the credit
|| || || || || || || || || || || ||
score.
Which action would a client take to improve a credit score? - ✔✔Pay delinquent accounts
|| || || || || || || || || || || || || ||
A client does not receive a written monthly statement from the credit card company. Which credit
|| || || || || || || || || || || || || || || ||
law could this omission violate? - ✔✔Fair Credit Billing Act
|| || || || || || || || ||
, A client shopping for a mortgage loan presents a housing counselor with an offer from a local
|| || || || || || || || || || || || || || || || ||
mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a
|| || || || || || || || || || || || || || || || || ||
20% down payment required. The counselor reviews the client file and determines the client's
|| || || || || || || || || || || || || ||
credit score is 725 and the client's total debt-to-income ratio is 20%. - ✔✔"I am unable to
|| || || || || || || || || || || || || || || || ||
determine whether the loan is predatory, but I suggest you shop around with other lending
|| || || || || || || || || || || || || || ||
sources."
Which action should a counselor recommend a client take first after discovering identity theft? -
|| || || || || || || || || || || || || || ||
✔✔File an identity theft report || || || ||
In which situation would a client's responsibilities, recurring costs, and upfront costs be
|| || || || || || || || || || || || ||
evaluated? - ✔✔When weighing housing options || || || || ||
A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the
|| || || || || || || || || || || || || || || || || ||
client can afford based on income if the client secures a conventional loan? - ✔✔$728
|| || || || || || || || || || || || || ||
Which type of government insured loan was created for financing homes in rural areas? -
|| || || || || || || || || || || || || || ||
✔✔USDA
A client keeps having budget problems due to unexpected expenses. Which financial tool would
|| || || || || || || || || || || || || ||
best assist this client to prepare for unexpected expenses and avoid increasing credit usage? -
|| || || || || || || || || || || || || || ||
✔✔Emergency Funds ||
A client has a monthly household income of $2,300, monthly debt payments of $450, and an
|| || || || || || || || || || || || || || || ||
optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment? -
|| || || || || || || || || || || || || || ||
✔✔$736
Use Front-End Ratio
|| ||
What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total
|| || || || || || || || || || || || || || || || || ||
of $88 in other consumer debt payments, and a gross household income of $4,460 per month
|| || || || || || || || || || || || || || || ||
(rounded to the nearest whole percent)? - ✔✔30% || || || || || || ||
Correct detailed answers
|| || ||
Which document is most important when working with a client to develop an initial budget as part
|| || || || || || || || || || || || || || || ||
of a Client Action Plan? - ✔✔Pay Stub
|| || || || || || || ||
A client would like to purchase a home within one year. The client is motivated to increase
|| || || || || || || || || || || || || || || || ||
household income as a way to save for a down payment and qualify for a loan. Which is the
|| || || || || || || || || || || || || || || || || ||
best solution for the client to reach this goal? - ✔✔Find a second job
|| || || || || || || || || || || || ||
A credit report may contain which information? - ✔✔The number of accounts in collection status
|| || || || || || || || || || || || || ||
Six months ago a client left a job as a reporter to start a
|| || || || || || || || || || || || ||
business in the retail industry. To prepare to buy a house, the client closed credit card accounts
|| || || || || || || || || || || || || || || || ||
and has been using savings to
|| || || || ||
pay down credit card debt and collections. The client has not
|| || || || || || || || || ||
been able to save much for a down payment with all the debt
|| || || || || || || || || || || ||
payments but knows about an affordable homeownership || || || || || ||
program that only requires a 1% down payment with an FHA
|| || || || || || || || || ||
loan. What might result from the client closing the credit card
|| || || || || || || || || ||
accounts? - ✔✔It increases credit utilization, causing a negative impact on the credit
|| || || || || || || || || || || ||
score.
Which action would a client take to improve a credit score? - ✔✔Pay delinquent accounts
|| || || || || || || || || || || || || ||
A client does not receive a written monthly statement from the credit card company. Which credit
|| || || || || || || || || || || || || || || ||
law could this omission violate? - ✔✔Fair Credit Billing Act
|| || || || || || || || ||
, A client shopping for a mortgage loan presents a housing counselor with an offer from a local
|| || || || || || || || || || || || || || || || ||
mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a
|| || || || || || || || || || || || || || || || || ||
20% down payment required. The counselor reviews the client file and determines the client's
|| || || || || || || || || || || || || ||
credit score is 725 and the client's total debt-to-income ratio is 20%. - ✔✔"I am unable to
|| || || || || || || || || || || || || || || || ||
determine whether the loan is predatory, but I suggest you shop around with other lending
|| || || || || || || || || || || || || || ||
sources."
Which action should a counselor recommend a client take first after discovering identity theft? -
|| || || || || || || || || || || || || || ||
✔✔File an identity theft report || || || ||
In which situation would a client's responsibilities, recurring costs, and upfront costs be
|| || || || || || || || || || || || ||
evaluated? - ✔✔When weighing housing options || || || || ||
A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the
|| || || || || || || || || || || || || || || || || ||
client can afford based on income if the client secures a conventional loan? - ✔✔$728
|| || || || || || || || || || || || || ||
Which type of government insured loan was created for financing homes in rural areas? -
|| || || || || || || || || || || || || || ||
✔✔USDA
A client keeps having budget problems due to unexpected expenses. Which financial tool would
|| || || || || || || || || || || || || ||
best assist this client to prepare for unexpected expenses and avoid increasing credit usage? -
|| || || || || || || || || || || || || || ||
✔✔Emergency Funds ||
A client has a monthly household income of $2,300, monthly debt payments of $450, and an
|| || || || || || || || || || || || || || || ||
optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment? -
|| || || || || || || || || || || || || || ||
✔✔$736
Use Front-End Ratio
|| ||
What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total
|| || || || || || || || || || || || || || || || || ||
of $88 in other consumer debt payments, and a gross household income of $4,460 per month
|| || || || || || || || || || || || || || || ||
(rounded to the nearest whole percent)? - ✔✔30% || || || || || || ||
