Chapter 6: QUIZ QUESTIONS

Conventional loans usually require the debt ratio to be: A.38% or lower. B. 42% or lower. C.39% or higher. D. 22% or lower.

Answer: A

Typically, when money is limited in the market..: A. credit standards become more stringent. B.credit standards become less stringent. C. credit standards remain unchanged. D.more borrowers are allowed access to mortgage funds.

Answer: A

What is the key characteristic of a first-time home buyer? A.Fear B.Lack of money C. Not knowing what he/she is looking for D. Need room to grow

Answer: A

How do lenders factor in rental income when underwriting a mortgage loan? A. Rent is never included as income. B. Just a percentage of rental income is used to account for periods when units are vacant. C. Just 25% of rental income is used to account for periods when units are vacant. D. The full amount of all rent is used as income.

Answer: B

Lenders most often treat a buyer's projected proceeds from the sale of an existing home as a: A. non-liquid asset. B.liquid asset. C.net loss. D.principal balance.

Answer: B

Mortgage lenders often consider court-ordered alimony as: A. unstable income. B.stable income. C.passive income. D. negative income.

Answer: B

What action should a seller take if someone appears at the door to see the house, and the seller has it listed with a broker? A. Get pertinent information about the buyer and send them away. .B. Get the person's name and immediately call the broker's office. C. Show the property, but get the person's name and phone number. D. Tell them to make an appointment with the broker and shut the door.

Answer: B

Which of the following improvements would be "overkill" when preparing a house for showing? A. Getting rid of personal effects B. Replacing the kitchen appliances C. Adding color to the landscaping D. Painting the interior a neutral color

Answer: B

Lenders perceive many credit inquiries in a short period of time as an indication that the borrower: A. has excellent credit. B. is planning a housing move. C. may be overextended. D. is concerned about his or her credit scores.

Answer: C

What is the key to a successful showing? A.Pre-qualifying the buyer B. Staging the house C.Organization D. Selecting the route

Answer: C

What is the primary purpose of the first meeting with a prospective buyer? A. To find out what type of buyer they are B. To find out what kind of home they are interested in C. To pre-qualify them D. To show them your five best listings

Answer: C

When a call comes in regarding your listing, the most important thing is to: A.get as much financial information as possible. B.disclose to the party limitations on access to the property. C.get the appointment to show the listing. D. use all available information to pre-qualify the potential prospect.

Answer: C

When evaluating a mortgage loan application, which of the following might signal a red flag when evaluating the Verification of Deposit forms? A.The bank account is in the borrower's name. B. There is sufficient cash in the bank to close the loan. C. The bank account is brand new. D. The bank account is a number of years old.

Answer: C

Which of the following sources of income do lenders not consider as stable income? A.Salary income B.Hourly income C.Unemployment benefits D.Contract income

Answer: C

Which of the following statements best defines default insurance? A.Default insurance is a policy that covers the borrower if the mortgage goes into default. B. Default insurance allows the borrower to seek a second mortgage to pay off the primary mortgage. C. Default insurance is a policy that covers the lender if the mortgage goes into default. D.Default insurance allows the lender to call the borrower's note without a penalty.

Answer: C

A FICO score is based on A. a scoring process that is based on gross and net income. B. an average of the past 5 years of Federal tax returns. C. future credit rates and adjusted income. D. a scoring process that awards or deducts points based on credit history.

Answer: D

During a showing, a Broker should: A. never leave the buyer alone. B.avoid mentioning obvious negatives about the property. C. address any buyer concerns directly. D. mention the best features first.

Answer: D

If someone calls Joe Broker about a listing during Joe's floor time, what should Joe do with the call? A. Tell the caller everything Joe can about the property. B. Ask the caller if he or she would like to see the property. C. Thank the caller for calling and record the information about the call in the log. D. Schedule an appointment to show the property.

Answer: D

What document is usually used to allow a lender to check the borrower's employment status? A. Employment Release B. Employment Disclosure C.Record of Employment D.Request for Verification of Employment

Answer: D

What is the most common stumbling block for buyers looking to move up in house size? Lack of money Having to sell an existing home first Ego Lack of clarity about the desired house characteristics

Answer: Having to sell an existing home first