Ground School Final

What is the largest house payment Ms. Joyce can have with her current income of $92,650 per year considering she has a $525 car payment and $0 in credit cards?

$2,161.83

Using the information provided, answer the following 80/15/5 question. Sales price: $350,000 Interest rate on a 30-year fixed rate 1st mortgage: 6.00% interest rate on HELOC 2nd mortgage: 4.00% Down payment: 5% Taxes: 1% Homeowners insurance: .3% What is the PITI using both mortgages?

$2,232.91

What is the maximum house payment Ms. Campese can afford with her current income of $104,400 per year, $300 car payment, $350 student loan and $50 credit card payment?

$2,432

Using the information provided, answer the following question for conventional financing. Sales price: $248,500 Down payment: 10% Seller contributions: $4,500 Closing Costs: 2.5% Prepaids: 1% What is the cash-to-close?

$28,426

Using the information provided answer the following rate/term refinance question (FNMA). Value: $370,000 Balance: $280,000 Current Payment: $2,450 Interest rate: 6.375% Closing Costs: 2.5% Prepaids: 1% What is the new loan amount/P&I payment/LTV

$293,150/$1828.88/79.23%

Chris earns $36,000 per year from his primary job. He also has a 2nd job in the same line of work earning $11.25 per hour. He is only able to work 12 hours a week on the second job but has been doing so for 8 months. What is his monthly qualifying income?

$3,000

Using the information provided, answer the following 80/10/10 question. Sales Price = $575,000 Interest rate on a 30-year fixed rate 1st mortgage: 4.5% Interest rate on a fixed-rate 2nd mortgage: 4.125% Down payment: 10% Taxes: 1% Homeowners insurance: .3% What is the PITI using both mortgages?

$3,232.34

On an FHA 203(k) Limited program purchase, a borrower is allowed up to ___ for repairs/renovations.

$35,000

Your borrower is paid $1,950 bi-weekly and has been on his job for three years. His wife works part-time and makes $10.25 and hour. She works 20 hours per week and has been on her job for two years. What is their combined monthly income?

$5,113

What is the maximum seller contribution allowed for an investment property at 80% LTV?

2%

After the borrower submits a complete loan application, the LE must be delivered or placed in the mail within how many days?

3 business days

The maximum allowable ratios for an owner-occupant when using a non-occupant co-borrower per FHLMC guidelines is ______.

35/43

Based on the following scenario, what is the borrower's qualifying ratios under FHLMC guidelines? PITI: $3,350 Income: $8,350 Debt: $595 Car payment

40.12%/47.25%

A borrower purchased a home on January 15th and is moving in on March 2nd. How many days from purchase to move in?

46 days

What is the borrower reserve requirement, using manual underwriting, for an investment property? (FHLMC)

6 months PITI for subject property and 2 months for each additional property

Based on a loan amount of $225,000, how many years will it take your customer to break-even if they choose to pay 1.5% in discount points to secure an interest rate of 6.00% as opposed to zero points for a 6.25% rate?

7.5 Years

Your borrowers are purchasing a home for $475,000. They are requesting a $380,000 first mortgage and a $71,250 HELOC. What will their LTV, second mortgage LTV, and down payment be if structured this way?

80/15/5

Reimbursed business expenses are ___ ____ the borrower's gross income.

Added to

The following factors are considered when determining the principal limit (maximum loan amount) for a reverse mortgage.

Amount of existing mortgage debt, property value, age of the youngest borrower

Which document is not necessary for the builder to provide the mortgage company on an FHA new construction loan prior to the loan being cleared to close?

Appraisal certificate

Which type of letter would be best for a borrower who has made an offer on a property and has provided their pay stubs, bank statements, and W-2s?

Commitment letter

Gross income may be considered effective when the applicant is planning to rent their current residence after closing on the purchase of their new home.

False

HOA dues are included in the PITI Calculations

False

HOE dues are included in the PITI calculation.

False

If a borrower tells you about a liability that is not listed on the credit report, it does not need to be included on the loan application.

False

If a student loan payment is deferred, it does not have to be included in the borrower's ratios. (FNMA/FHLMC)

False

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

On an FHA loa, the upfront MIP should be included when calculating cash-to-close.

False

Revolving and open-end accounts can be omitted from the debt ratio if the minimum monthly required payment will pay off the account in less than 10 months.

False

The Maximum LTV for an FHA purchase is 97%.

False

The builder must provide an appraisal certificate to the mortgage company on an FHA new construction loan prior to closing.

False

Unless a borrower can document extenuating circumstances, they must wait at least 7 years from a Chapter 7 Bankruptcy or foreclosure to apply for conventional financing.

False

VA sets their own maximum loan limits.

False

If gift funds will be utilized in the purchase, what documentation is required?

Gift letter stating the amount of the gift, that it does not need to be repaid, and the donor is a family member. Verification that the donor has the available funds to make the gift. Verification that the borrower has deposited the funds into an account.

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

Based on the following scenario, does the borrower qualify within FNMA guidelines? PITI: $1,725 Monthly income: $7,000 Debt: $700 car payment, $375 student loan ($2,250 balance) $170 credit card payments ($1,530 balance)

No

Based on the following scenario, does the borrower qualify within the FHLMC guidelines? PITI: $1,375 Income: $4,950 Debt: $350 car payment, $420 student loan ($4,500 balance) $75 credit card payments ($850 balance)

No

A borrower who has made an offer on a property, but has not yet provided their paystubs, bank statements, and W2s would be issued which letter?

None of the above/single tenancy

A Veteran may be exempt from the VA funding fee if they:

Receive benefits for a service-related disability.

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, and foreign nationals.

If a veteran has previously used their VA entitlement and it has not yet been restored, their COE may show an available amount which is less than the VA maximum allowable entitlement.

TRUE

Lender Paid Mortgage Insurance (LPMI) is a one-time, single premium paid by the lender. In turn, the lender increases the borrower's interest rate to cover the cost of the mortgage insurance paid on their behalf.

True

On an FHA 203(k) limited purchase, a borrower is allowed to finance up to $35,000 for repairs/renovations.

True

Relief refinance program loans are designed to help homeowners who are current on their mortgage payments but are unable to refinance due to drop in their home value.

True

Residual income is the amount of income available for family support after taxes and social security expense have been subtracted from the gross income and after PITI and other long-term debt has been paid.

True

Tenancy in Common is not an acceptable manner in which a title may be held.

True

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 funding fee for an active-duty veteran who has previously used their eligibility and is purchasing a home with zero down is 3.6%

True

VA Requires connection to a public community water/sewer disposal system if required by local building, planning, or health authorities.

True

When considering a FHLMC loan, the maximum allowable ratios for the owner occupant when using a non-occupant co-borrower a 35/43

True

When taking an application for a VA loan on new construction, it is very important to order the appraisal:

When the house is complete

Redisclosure of the Truth in Lending is required if the APR changes more than ___% on a fixed rate loan?

.125

On an ARM, redisclosure of the Truth in Lending is required if the APR charges more than ___ %?

.25

What is the VA funding fee for a veteran who has not used his/her eligibility and plans on purchasing a home with 5% down payment?

1.65%

A veteran may exchange a portion of their entitlement for cash.

False

Churning schemes usually involve falsified down payment amounts and falsified appraisals.

False

A borrower that is self-employed (Schedule C) will typically not be required to provide a YTD paystub.

True

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

A stand-alone is a second mortgage obtained separately from a first mortgage.

True

A stand-alone second mortgage is obtained separately from a first mortgage.

True

A veteran and a spouse may qualify together for 100% financing on a VA loan.

True

Desktop Underwriter (DU) is one of the most widely used automated underwriting systems in the mortgage industry.

True

Desktop Underwriting (DU) would result in a decision of Approve/Ineligible on a loan with excellent credit which qualifies as a jumbo loan program.

True

Except for high-cost areas, the maximum loan amount on a 1-unit, single family residence is $647,200

True

FHLMC qualifying ratios are 28/36.

True

HOA dues should be added to the PITI for the purpose of calculating ratios when qualifying a borrower.

True

HomeOne will allow up to 97% LTV for a primary residence, 1-unit purchase if at least one of the borrowers has not owned a home in the last 3 years. A borrower who has not owned a home in the last three years is considered a first-time home buyer under HomeOne.

True

If a borrower qualifies for an agency loan of $215,000, FHLMC is a viable loan option.

True

If a borrower qualifies for an agency loan of $297,750, FHA is a viable option.

True

If a borrower qualifies for an agency loan of $325,000, FNMA is a viable loan option.

True

Interest and dividend income for a borrower can be located on Schedule B of their tax returns.

True

Joint tenants with right of survivorship (JTWROS) is an acceptable manner in which the title may be held.

True

Judgements and tax liens are required to be paid off at or prior to loan closing.

True

Which of the following is the correct list of charges included when calculating the borrower's cash-to-close?

Down payment, closing costs, prepaids, discount points, MI paid in cash

A 3-Year ARM adjusts every 3 years.

False

A borrower paid semi-monthly, and a borrower paid bi-weekly have the same number of pay periods per year.

False

A borrower requesting a jumbo loan will qualify for an agency loan.

False

A loan officer can locate the summary of the eligibility requirements for a loan to be sold to a specific lender/investor in the lender specs.

False

A partner's percentage of ownership and earnings can be located on Schedule E part II of their personal tax return.

False

A 3-Year ARM adjusts every 3 years

True

A 30-year conventional loan with an 87% LTV would require 25% mortgage insurance coverage

True

A HELOC loan has an interest only payment.

True

A HELOC second mortgage may or may not be fully disbursed at closing. Typically, it has a variable interest rate with an interest only payment. There is a designated draw period and repayment period.

True

A borrower must qualify at the note rate on a temporary buy-down, not the start rate.

True