HUD HOUSING COUNSELOR LATEST EXAM SET QUESTIONS
AND ANSWERS FIRM A+
✔✔Section of Credit Report: Public Records - ✔✔Items that are listed in the public
record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
✔✔Section of Credit Report: Personal information - ✔✔Consumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
✔✔Section of Credit Report: Account / Trade line information - ✔✔Info about each
consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
✔✔Payment History - ✔✔Timely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
✔✔Type of credit used - ✔✔Positive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
✔✔Length of credit history - ✔✔-How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Negative- shorter history provides little to no info for lenders - higher risk
✔✔Capacity Used - ✔✔-How much of credit available has the person used
Positive: low credit utilization = financial management
Negative: High credit card balances = poor financial management - maxed out credit
cards
✔✔Strategies to increase income (9) - ✔✔-Find second job
-Work Over time
-Negotiate higher salary / wage
-Sell assets (e.g. car)
,-Hold a yard/garage sale
-Teach a skill / craft/ activity
-Sell a craft
_Charge rent (adult +dependents living @ home)
-Evaluate tax withholding's (if over-with holding) change to increase income received)
✔✔Items to include when tracking expenses - ✔✔Monthly bills (utilities, cell phone, etc.)
All Fixed monthly expenses all cash expenses
Seasonal or annual expenses (i.e car registration, gifts, holiday season, vacation)
✔✔Documents to use when tracking expenses - ✔✔-Bills
-Bank statements
-Credit cards statements
-Records for estimated amount of expected periodic expense
✔✔Chapter 7 bankruptcy - ✔✔Liquidation bankruptcy
-Process of selling non-exempt assets to repay creditors in Chapter 7 bankruptcy
-Must meet w/an attorney to determine ability to repay debts - means test
✔✔Tips for avoiding predatory lending - ✔✔1.Shop for a loan
2.Ask questions
3.Beware of deals that sound to o good to be true
4. Know and understand you financial situation
✔✔Credit Score - ✔✔A numerical interpretation of a customer's creditworthiness based
on information in his/her credit report
✔✔How to fix:
No credit / Poor credit / Limited Credit - ✔✔-Open a credit card
-Secured credit card
✔✔Items to include when tracking income - ✔✔-Regular salary
-Temporary jobs
-Unemployment compensation
-Public assistance
✔✔Items not to include when tracking income - ✔✔-Pre -tax payroll deductions
-Credit report
✔✔Things to consider when choosing a bank account - ✔✔Services Fees- account
maintenance, wire transfer, check purchasing, money order, negligence fees - overdraft,
stop payments, insufficient funds
Fun access features-location, ATM'S, online banking, customer service
✔✔Common Predatory Lending tactics - ✔✔1. Limited time offers
,2. High risk loans (consulting / unclear terms)
3. Higher loan amounts (more than person can afford)
4. High fees or cost
5. False of hidden disclosures
6. Loan flipping (encouraged to refinance existing loans)
✔✔Strategies for advising clients on investing for retirement - ✔✔-Explain importance of
savings for retirement
-Highlight the benefits of tax-incentivize accounts
✔✔Features of a good - Large purchase savings account - ✔✔For large purchase
-Limited accessibility
-Good returns-
*High-interest savings
*Money market
*Cd
✔✔Features of a good emergency fund account - ✔✔-Liquid-money can be retrieved
w/o penalties
-Direct deposit or automatic transfer available
-Limited accessibility (not tempted to dip into it)
i.e.-interest bearing savings accts. money market accts
✔✔New Credit - ✔✔Positive: credit applications can lead to new credit accounts or
loans, which can establish history over time
Negative: too many inquiries or new credit accounts in a short period will raise
questions for venders
✔✔Area Median Income - ✔✔-The midpoint in the family income range for a
metropolitan statistical area or for the non-metropolitan parts of a state
-Determinate annually by HUD very low, low, moderate, above moderate
✔✔Capital - ✔✔How much money a borrower has saved to pay a deposit or down
payment for the home she/he intends to purchase
✔✔USDA - ✔✔United States Department of Agriculture rural Development program for
people interested in living in eligible rural areas
-Low rates, no down payments, low-moderate income
-Less than 115% of AMI
-Must be w/o adequate housing
✔✔Capacity - ✔✔Capacity to pay outstanding debt
-The consistency of employment + income
-Adequacy of income to repay debt
-Recurring debts
, - Frecuency + type of wages
✔✔Why would you get a 2nd mortgage? - ✔✔If don't have enough for 20 % down
payment, might get 2nd mortgage for 205 to ensure that PMI is not required
✔✔Gross Monthly Income - ✔✔Money earned before taxes + other deductions
✔✔P I T I A - ✔✔Principal
Interest
Taxes
Insurance
Association Dues
✔✔Private Mortgage Insurance - ✔✔Policy that projects a lender from potential risks
when a homeowner pays less than 205 for a down payment
Homeowner pays monthly payment
✔✔Front end ratio formula - ✔✔Monthly housing expenses
Gross monthly income
28% affordable for conventional loan
81% guideline for FHA loan
30% for renters
✔✔Down Payments - ✔✔Cash payment that home buyers are required to pay when
closing on a home loan
% of the total price of the home
✔✔When can you request that a vender remove PMI from monthly payments? -
✔✔When mortgage balance is 80% of the original value of home
✔✔Renting recurring costs - ✔✔-Rental payment
-Renters insurance
-Monthly cable + utilities fees
✔✔Equity - ✔✔Value of ownership interest in property
Difference between fair market value of a property + the remaining mortgage balance
owed
✔✔Adjustable Rate Mortgage (ARM) - ✔✔Initial interest rate for a defined period or time
+then adjust pre-determinate intervals for the life of the loan
Can increase or decrease, but there are caps to how large the adjustment can be
✔✔Second Mortgage - ✔✔Subordinate loan on a property
AND ANSWERS FIRM A+
✔✔Section of Credit Report: Public Records - ✔✔Items that are listed in the public
record, including -bankruptcy
- judgments
-tax liens
- wage garnishments
✔✔Section of Credit Report: Personal information - ✔✔Consumer identification
information, including:
-Name
- Social Security number
- Addresses
-Phone #
- Employer's
✔✔Section of Credit Report: Account / Trade line information - ✔✔Info about each
consumer credit account, including:
- payment history
- account dates
- credit limit
- balances owed
✔✔Payment History - ✔✔Timely / Late
- Payments:Positive: timely
- Negative: late - lien, judgment, collection account, charge-off account
✔✔Type of credit used - ✔✔Positive: Different types of credit show variety -
demonstrates that consumers can manage different types of credit
Negative: Fever types show limited profile info - higher risk
✔✔Length of credit history - ✔✔-How long a person has bad credit
Positive: Longer credit history provides more info for lenders - lower risk
Negative- shorter history provides little to no info for lenders - higher risk
✔✔Capacity Used - ✔✔-How much of credit available has the person used
Positive: low credit utilization = financial management
Negative: High credit card balances = poor financial management - maxed out credit
cards
✔✔Strategies to increase income (9) - ✔✔-Find second job
-Work Over time
-Negotiate higher salary / wage
-Sell assets (e.g. car)
,-Hold a yard/garage sale
-Teach a skill / craft/ activity
-Sell a craft
_Charge rent (adult +dependents living @ home)
-Evaluate tax withholding's (if over-with holding) change to increase income received)
✔✔Items to include when tracking expenses - ✔✔Monthly bills (utilities, cell phone, etc.)
All Fixed monthly expenses all cash expenses
Seasonal or annual expenses (i.e car registration, gifts, holiday season, vacation)
✔✔Documents to use when tracking expenses - ✔✔-Bills
-Bank statements
-Credit cards statements
-Records for estimated amount of expected periodic expense
✔✔Chapter 7 bankruptcy - ✔✔Liquidation bankruptcy
-Process of selling non-exempt assets to repay creditors in Chapter 7 bankruptcy
-Must meet w/an attorney to determine ability to repay debts - means test
✔✔Tips for avoiding predatory lending - ✔✔1.Shop for a loan
2.Ask questions
3.Beware of deals that sound to o good to be true
4. Know and understand you financial situation
✔✔Credit Score - ✔✔A numerical interpretation of a customer's creditworthiness based
on information in his/her credit report
✔✔How to fix:
No credit / Poor credit / Limited Credit - ✔✔-Open a credit card
-Secured credit card
✔✔Items to include when tracking income - ✔✔-Regular salary
-Temporary jobs
-Unemployment compensation
-Public assistance
✔✔Items not to include when tracking income - ✔✔-Pre -tax payroll deductions
-Credit report
✔✔Things to consider when choosing a bank account - ✔✔Services Fees- account
maintenance, wire transfer, check purchasing, money order, negligence fees - overdraft,
stop payments, insufficient funds
Fun access features-location, ATM'S, online banking, customer service
✔✔Common Predatory Lending tactics - ✔✔1. Limited time offers
,2. High risk loans (consulting / unclear terms)
3. Higher loan amounts (more than person can afford)
4. High fees or cost
5. False of hidden disclosures
6. Loan flipping (encouraged to refinance existing loans)
✔✔Strategies for advising clients on investing for retirement - ✔✔-Explain importance of
savings for retirement
-Highlight the benefits of tax-incentivize accounts
✔✔Features of a good - Large purchase savings account - ✔✔For large purchase
-Limited accessibility
-Good returns-
*High-interest savings
*Money market
*Cd
✔✔Features of a good emergency fund account - ✔✔-Liquid-money can be retrieved
w/o penalties
-Direct deposit or automatic transfer available
-Limited accessibility (not tempted to dip into it)
i.e.-interest bearing savings accts. money market accts
✔✔New Credit - ✔✔Positive: credit applications can lead to new credit accounts or
loans, which can establish history over time
Negative: too many inquiries or new credit accounts in a short period will raise
questions for venders
✔✔Area Median Income - ✔✔-The midpoint in the family income range for a
metropolitan statistical area or for the non-metropolitan parts of a state
-Determinate annually by HUD very low, low, moderate, above moderate
✔✔Capital - ✔✔How much money a borrower has saved to pay a deposit or down
payment for the home she/he intends to purchase
✔✔USDA - ✔✔United States Department of Agriculture rural Development program for
people interested in living in eligible rural areas
-Low rates, no down payments, low-moderate income
-Less than 115% of AMI
-Must be w/o adequate housing
✔✔Capacity - ✔✔Capacity to pay outstanding debt
-The consistency of employment + income
-Adequacy of income to repay debt
-Recurring debts
, - Frecuency + type of wages
✔✔Why would you get a 2nd mortgage? - ✔✔If don't have enough for 20 % down
payment, might get 2nd mortgage for 205 to ensure that PMI is not required
✔✔Gross Monthly Income - ✔✔Money earned before taxes + other deductions
✔✔P I T I A - ✔✔Principal
Interest
Taxes
Insurance
Association Dues
✔✔Private Mortgage Insurance - ✔✔Policy that projects a lender from potential risks
when a homeowner pays less than 205 for a down payment
Homeowner pays monthly payment
✔✔Front end ratio formula - ✔✔Monthly housing expenses
Gross monthly income
28% affordable for conventional loan
81% guideline for FHA loan
30% for renters
✔✔Down Payments - ✔✔Cash payment that home buyers are required to pay when
closing on a home loan
% of the total price of the home
✔✔When can you request that a vender remove PMI from monthly payments? -
✔✔When mortgage balance is 80% of the original value of home
✔✔Renting recurring costs - ✔✔-Rental payment
-Renters insurance
-Monthly cable + utilities fees
✔✔Equity - ✔✔Value of ownership interest in property
Difference between fair market value of a property + the remaining mortgage balance
owed
✔✔Adjustable Rate Mortgage (ARM) - ✔✔Initial interest rate for a defined period or time
+then adjust pre-determinate intervals for the life of the loan
Can increase or decrease, but there are caps to how large the adjustment can be
✔✔Second Mortgage - ✔✔Subordinate loan on a property
