HUD Practice Exam/ 89 Q&A/ Newly Updated
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: List of Assets
Retirement plan statement
Pay stub X
Current lease
A client would like 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? - Answer:
A credit report may contain which information? - Answer: Income history
Criminal record
,# of accounts in collection status
A history of payments on an electric bill
A credit report contains inaccurate information. Which action item should the
counselor include in the Client Action Plan? - Answer: FIle a dispute with the
appropriate credit reporting agency
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? - Answer:
Which action would a client take to improve a credit score? - Answer:
A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate? - Answer: FCBA
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%.
The client asks the housing counselor if the offer is a case of illegal predatory
lending. How should the housing counselor respond? - Answer: I am unable to
determine whether the loan is predatory but i suggest you shop around with
other ledning sources
Which action should a counselor recommend a client take first after discovering
identity theft? - Answer: File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront
costs be evaluated? - Answer: 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? - Answer: Front End Ratio Formula
Conventional = <28%
Which type of government insured loan was created for financing homes in rural
areas? - Answer: 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? - Answer: Emergency Fund
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: List of Assets
Retirement plan statement
Pay stub X
Current lease
A client would like 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? - Answer:
A credit report may contain which information? - Answer: Income history
Criminal record
,# of accounts in collection status
A history of payments on an electric bill
A credit report contains inaccurate information. Which action item should the
counselor include in the Client Action Plan? - Answer: FIle a dispute with the
appropriate credit reporting agency
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? - Answer:
Which action would a client take to improve a credit score? - Answer:
A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate? - Answer: FCBA
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%.
The client asks the housing counselor if the offer is a case of illegal predatory
lending. How should the housing counselor respond? - Answer: I am unable to
determine whether the loan is predatory but i suggest you shop around with
other ledning sources
Which action should a counselor recommend a client take first after discovering
identity theft? - Answer: File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront
costs be evaluated? - Answer: 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? - Answer: Front End Ratio Formula
Conventional = <28%
Which type of government insured loan was created for financing homes in rural
areas? - Answer: 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? - Answer: Emergency Fund
