- Credit Smart Exam with detailed questions
and 100% correct answers- Freddie Mac
The loan servicer accepts the transfer of the title of the home back to them in exchange
for cancellation of your mortgage debt. - CORRECT ANSWER Deed in Lieu of
Foreclosure
The following are alternatives to foreclosure (select all that apply): - CORRECT
ANSWER--Reinstatement
--Forbearance
--Loan modification
--Repayment plan
--Refinance
Homebuyers who don't have a 20% down payment saved might have the following
options: - CORRECT ANSWER ALL OF THE BELOW:
(--Adhering to a stricter spending plan, tracking expenses using a budgeting app, and
saving for a down payment
--Looking into low down payment mortgage products, including conventional Freddie
Mac or Fannie Mae products, FHA loans or other loan products offered by lenders
--Exploring down payment assistance programs in their market including federal, state
and local programs for eligible homebuyers)
Many lenders require an escrow account to hold funds for property taxes and property
insurance payments. To ensure that taxes and insurance are paid on time, it's a good
idea to ask your mortgage company to set up an escrow account for this purpose even
if you're not required to have one. - CORRECT ANSWER True
When determining whether to make a mortgage loan to a homebuyer, lenders consider
the 4 C's of lending: Capacity, Capital, Credit and Collateral.
Select the term that fits the description below:
Do you have property you can pledge as a security for a debt/loan? - CORRECT
ANSWER Collateral
True or False? It's not possible for people with student loan debt to become
homeowners. - CORRECT ANSWER False
Home equity is the difference between what your home is worth and the total amount
you still owe on any loans secured by the home. How can you build equity? Choose the
, best answer. - CORRECT ANSWER Having a home's value increase and/or paying
down the mortgage
What makes up a credit score (based on the FICO model)? Select the score percentage
applicable to the credit characteristic below: Amounts owed. - CORRECT ANSWER
30%
True or False. The first step in the home buying process is to apply for a loan so you
know how much you can afford? - CORRECT ANSWER False
True or False? Your PITIA payments (your monthly mortgage payments that include
principal, interest, taxes, insurance and homeowners or condominium association fees)
may change each year, even if you have a fixed-rate mortgage. - CORRECT ANSWER
True
Select the correct term corresponding with the definition below. Your income before
taxes and other deductions. - CORRECT ANSWER Gross monthly income
True or False? Contingencies are items within a property that the homebuyer would like
to have included in the purchase. - CORRECT ANSWER False
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing
payment, which includes: - CORRECT ANSWER Principal, interest, property taxes,
homeowner's insurance, mortgage insurance, homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts. - CORRECT ANSWER False
The principal amount is the total amount borrowed. - CORRECT ANSWER True
Do lenders use gross income or net profits when calculating mortgage affordability for
self-employed borrowers? - CORRECT ANSWER Net profits
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments. - CORRECT ANSWER False
Having adequate cash reserves demonstrates to your lender that you have responsibly
managed your money and have savings and other assets to fall back on in case of
emergency. - CORRECT ANSWER True
Capital - or cash to close - refers to the funds you need to save in order to cover the
cost of down payment and closing costs. - CORRECT ANSWER True
Acceptable sources of capital include: - CORRECT ANSWER Funds from a family
member, funds from a down payment assistance program or funds from your savings
account
and 100% correct answers- Freddie Mac
The loan servicer accepts the transfer of the title of the home back to them in exchange
for cancellation of your mortgage debt. - CORRECT ANSWER Deed in Lieu of
Foreclosure
The following are alternatives to foreclosure (select all that apply): - CORRECT
ANSWER--Reinstatement
--Forbearance
--Loan modification
--Repayment plan
--Refinance
Homebuyers who don't have a 20% down payment saved might have the following
options: - CORRECT ANSWER ALL OF THE BELOW:
(--Adhering to a stricter spending plan, tracking expenses using a budgeting app, and
saving for a down payment
--Looking into low down payment mortgage products, including conventional Freddie
Mac or Fannie Mae products, FHA loans or other loan products offered by lenders
--Exploring down payment assistance programs in their market including federal, state
and local programs for eligible homebuyers)
Many lenders require an escrow account to hold funds for property taxes and property
insurance payments. To ensure that taxes and insurance are paid on time, it's a good
idea to ask your mortgage company to set up an escrow account for this purpose even
if you're not required to have one. - CORRECT ANSWER True
When determining whether to make a mortgage loan to a homebuyer, lenders consider
the 4 C's of lending: Capacity, Capital, Credit and Collateral.
Select the term that fits the description below:
Do you have property you can pledge as a security for a debt/loan? - CORRECT
ANSWER Collateral
True or False? It's not possible for people with student loan debt to become
homeowners. - CORRECT ANSWER False
Home equity is the difference between what your home is worth and the total amount
you still owe on any loans secured by the home. How can you build equity? Choose the
, best answer. - CORRECT ANSWER Having a home's value increase and/or paying
down the mortgage
What makes up a credit score (based on the FICO model)? Select the score percentage
applicable to the credit characteristic below: Amounts owed. - CORRECT ANSWER
30%
True or False. The first step in the home buying process is to apply for a loan so you
know how much you can afford? - CORRECT ANSWER False
True or False? Your PITIA payments (your monthly mortgage payments that include
principal, interest, taxes, insurance and homeowners or condominium association fees)
may change each year, even if you have a fixed-rate mortgage. - CORRECT ANSWER
True
Select the correct term corresponding with the definition below. Your income before
taxes and other deductions. - CORRECT ANSWER Gross monthly income
True or False? Contingencies are items within a property that the homebuyer would like
to have included in the purchase. - CORRECT ANSWER False
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing
payment, which includes: - CORRECT ANSWER Principal, interest, property taxes,
homeowner's insurance, mortgage insurance, homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts. - CORRECT ANSWER False
The principal amount is the total amount borrowed. - CORRECT ANSWER True
Do lenders use gross income or net profits when calculating mortgage affordability for
self-employed borrowers? - CORRECT ANSWER Net profits
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments. - CORRECT ANSWER False
Having adequate cash reserves demonstrates to your lender that you have responsibly
managed your money and have savings and other assets to fall back on in case of
emergency. - CORRECT ANSWER True
Capital - or cash to close - refers to the funds you need to save in order to cover the
cost of down payment and closing costs. - CORRECT ANSWER True
Acceptable sources of capital include: - CORRECT ANSWER Funds from a family
member, funds from a down payment assistance program or funds from your savings
account
