COURSE III. QUALIFYING THE BORROWER TEST

A closed-end second mortgage typically includes which of the following?

no of the above

On a conventional mortgage, a lender may use a higher ratio when there are fully documented compensating factors that justify using the higher ratio and/or the DU/LP issues the approval.

true

Stand-alone is the term used when a second mortgage is being obtained separately from a first mortgage.

true

What is the monthly MI payment given the following scenario: $295,000 sales price10% down payment1-year ARM with 2/6 caps30-year amortization Agency loan Owner-occupied

$165.94 [ 295,000 * 10%= 29,500 --> 295,000-29,500 = 265,500 --> LTV = 265,500/295,00 = 90% --> Coverage=25% --> MI Factor = 0.75% --> Monthly MI = (265,500*0.75%)/12 =$165.94 ]

What is the largest house payment that Mr. Knight can have with his current income of $87,600 per year considering he has $450 car payment and $0.00 credit cards? (FHLMC)

$2,044 [ 7,300 * 28% = $2,044 7,300* 36% = $2,628 - 450 = $2,178 --> $2,044 ]

Which of the following makes up the cash to close for a mortgage? (Select all that apply)

- Down payment - Closing costs -Prepaids - Discount points

Using the information provided, answer the following question: Sales price = $187,000 Interest Rate = 6.25% 30 year fixed Down Payment = 10% Agency Loan Owner Occupied Taxes = 1.5% Homeowners Insurance = .3% What is the monthly MI payment?

$86.96 [ 187,000*10% = 18,700 --> 187,000 - 18,700 = 168,300 --> LTV = 168,300/187,000 = 90% Coverage= 25% MI Factor = 0.62% (168,300*0.62%) / 12 = $86.96 ]

Calculate ratio(s) on the following using FHLMC guidelines: PITI: $1,479 monthly Income: $7,500 monthly Debt: $390 car payment ($3,500 balance), $500 car payment ($12,500 balance), $220 student loan ($1,500 balance),$100 credit card payments ($900 balance)

19.72/27.72 [ 1479/7500 = 19.72

Using the Financed MI method, calculate the correct coverage requirement and MI factor, based on the following scenario: $245,000 sales price 10% down payment 718 credit score 30-year fixed-rate Agency loan Owner-occupied

25% / 1.45% [220,500/245,000 = 90% coverage = 25% MI Factor = 1.45%

On FHA loans, what are the published qualifying ratio(s)?

31/43

Calculate ratio(s) on the following using Fannie Mae guidelines. PITI: $2,350 monthly Income: $85,320 per year Debt: $550 car payment ($2,500 balance), $370 furniture payment ($8,700 balance), $0.00 credit card payments

38.26% [2350+370 / 7110 = .3826 --> 38.26%

Calculate ratio(s) on the following using Fannie Mae guidelines. PITI: $1,445 monthly Income: $4,700 monthly Debt: $550 car payment

42.45 back ratio only [ 1445 + 550 / 4700 = 0.42446 --> 42.45%

Using the information provided, answer the following question: Sales price = $195,000 Interest Rate = 6 .5% 30 year terms 2/1 Buy down Down Payment = 5% Taxes = 1% Homeowners Insurance = .3% What is the rate year two?

5.5% [ 195,000*5%= 9,750 195,000-9750= 185,250 185,250/195000 = LTV = 95%]

Calculate ratio(s) on the following using Fannie Mae guidelines: PITI: $2,466 monthly Income: $6,600 monthly Debt: $350 & $800 car payments, $220 student loan, $25 credit card payments

58.50 back ratio only [ 2466 +350+800+220+25 / 6,600 = 0.585 --> 58.5% ]

In qualifying on conventional loans, legal debts do not have to be counted in the ratios regardless of duration.

False

Which agency has a 41 back ratio only?

VA

What is the monthly MI factor based on the following scenario? $283,500 sales price $28,350 down payment 2-1 buy down 30-year amortization Agency loan Owner occupied

0.72% [225,150/283,500 = 90% LTV Coverage = 25% MI Factor = 0.71% ]

What is the largest house payment that Mr. Giles can have with his current income of $47,000 per year considering he has no debt? (FHLMC)

$1,096.67 [ 47,000/12 = 3,916.67 --> 3,916.67 * 28% = $1,096.67 3,916.67 *36% = $1,410 (pick lowest out of the two) ]

What is the largest house payment that Mr. Shultz can have with his current income of $63,780 per year considering he just bought a car with a payment of $700 per month? (FNMA)

$1,213.40 [63,780/12 = 5,315 * 36% = $1,913.40 $1,913.40 - 700 = $1,213.40

What is included in cash to close? (Select all that apply)

-Origination fee -Appraisal fee -State tax -Recording fee

The following paragraph describes a Piggyback (fixed rate) second mortgage. "This second mortgage works like a credit card. It will provide for a maximum loan amount that may or may not be fully disbursed at closing. This type of second mortgage usually has a variable interest rate, such as prime plus zero. There will normally be a draw period as well as a specific amount of time in which the loan must be completely repaid."

FALSE

Which of the following does not consider day care debt in the qualifying ratios? (Select all that apply.) VA loans FHA loans FNMA loans FHLMC loans

FHA loans FNMA loans FHLMC loans

On VA loans, the VA is not very strict regarding job stability.

false

Private mortgage insurance protects the borrower in case of default.

false

You do count installment debt if they have less than 10 months remaining.

false