Mock Exam Review Questions and Answers Graded A

Mock Exam Review Questions and Answers Graded A (T or F): If a borrower tells you about a liability that is not listed on the credit report, it doesn't need to be included on the loan application. False What is the maximum seller contribution allowed for a primary residence below 75% LTV? (FNMA/FHLMC) 9% (T or F) DU does not consider non-occupant income as qualifying income True (T or F) HOA dues are included in the PITI calculation. False Using the following information, answer the following conventional financed MI loan question. Sales Price = $185,000 Down Payment = 10% Credit Score = 635 20-year Fixed Owner-occupied What is the Total Loan Amount and MI Factor? $169,247/1.65% How many days must a borrower wait to close once they receive their initial disclosures? 7 (T or F) The maximum LTV for an FHA cash-out refinance is 80%. True Based on the following scenario, does the borrower qualify within the FHLMC guidelines? PITI: $1,375 monthly Income: $4,950 monthly Debt: $350 car payment, $420 student loan ($4,500 balance), $75 credit card payments ($850 balance). No (T or F) A sole proprietor's net profit or loss can be located on Schedule C of their personal tax return True (T or F) When using automated underwriting for a FNMA loan, DU will determine the borrower's reverse requirement for an investment property. True (T or F) The ATR and QM rules state that lenders must make a reasonable, good-faith determination of a borrower's ability to repay before consummation of the mortgage loan True The maximum allowable ratios for an owner-occupant when using a non-occupant co-borrower per FHLMC guidelines is _______. 35/43 (T or F) A borrower paid semi-monthly and a borrower paid bi-weekly have the same number of pay periods per year. False (T or F) A borrower must qualify at the note rate on a temporary buydown, not the start rate. True (T or F) If your borrower is being relocated and needs to close in 30-days, and their spouse will not be moving for 3 months, the spouse's income can still be used to qualify. False Your borrower receives quarterly bonuses and wants to pay down their mortgage. Their current balance is $289,900 and their interest rate is 6.625% on an interest-only loan. What is their new monthly payment if they pay $30,000 towards the principal balance? $1,434.87 (T or F) Loan Product Advisor (LPA) is one of the most widely used automated underwriting systems in the mortgage industry. True (T or F) A lender must notify an applicant of action taken within 30 days after receiving a completed application concerning the lender's approval of, counteroffer to, or adverse action on the application. True Using the information provided, answer the following FHA question: Sales Price = $245,600 Interest Rate = 4.25% 30-year Fixed Taxes = 1.5% Homeowners Insurance = .3% What is the PITI? ??? (T or F) A 3-Year ARM adjusts every 3 years. True (T or F) HOA dues should be added to the PITI for the purpose of calculation ratios when qualifying a borrower. True (T or F) A Loan Officer can locate the summary of eligibility requirements for a loan to be sold to a specific lender/investor in the lender specs. False What is the qualifying rate for a 5/1 ARM with a note rate of 3.75% and 2/6 caps? The fully-indexed rate is 6.00%. ??? Three different categories of non-US Citizens that may apply for a mortgage loan and may or may not qualify are: Resident Aliens Non-Resident Aliens Foreign Nationals Which of the following loan options would be best for a borrower looking to stay in the home for 3 years? ??? (T or F) On a FHA 203(k) Limited purchase, a borrower is allowed to finance up to $35,000 for repairs/renovations. True (T or F) Tenancy in Common is not an acceptable manner in which title may be held. False What is the qualifying rate for a 7/1 ARM with a note rate of 6.00% and 2/6 caps? The fully-indexed rate is 5.98%. 6.00% (T or F) A HUD Consultant would not be required for an FHA 203(k) Standard program. False (T or F) A liability not listed on the credit report will typically need to be included on the loan application. True It is ultimately the _______ responsibility to take a thorough loan application, to make sure all required documents are requested, and to effectively relay the decision to the borrowers. Loan Officer's