Unit 15

A borrower wants to obtain a conventional loan in the amount of $130,000 with a monthly PITI payment of $950.00. The HOA dues are projected to be $50 per month. The borrower has a car payment of $325 and additional recurring debt of $280.00. What is the minimum monthly income the borrower needs in order to qualify for the loan if the lender is using debt ratios of 28/36%?

$4,458

Using the 28/36 rule, how much monthly income must one have to qualify for a $130,000 loan at 6% for 20 years if the proposed PI will be $1,008 and TI will be $145 and the borrower has other monthly recurring debts of $695.

$5,134

Using the 28/36 rule, how much annual income must one have to qualify for a $210,000 loan at 3.5% for 30 years if the proposed PITI will be $1,113, mortgage insurance is $55, HOA dues are $65, and the borrower has other monthly recurring debts of $695?

$5,356

A borrower wants to obtain a conventional loan in the amount of $250,000 with a monthly PITI payment of $1,150. The HOA dues are projected to be $75 per month. The borrower has a car payment of $415 and additional recurring debt of $300. What is the minimum monthly income the borrower needs in order to qualify for the loan if the lender is using debt ratios of 28/36%?

$5,389

A couple wants to obtain a 30-year mortgage loan for $175,000 at 6.5%. Their principal and interest payment is $1,106. Their monthly escrow payment is estimated at $145 and they must pay mortgage insurance of $60 per month. They have other recurring debt expenses of $750. What is the minimum monthly income they need to earn in order to qualify for the loan if the lender is using expense-to-income ratios of 28/36%?

$5,725

Ricardo is assisting Carissa in the home buying process and has introduced her to a local lender to get prequalified before looking at properties. Which of the following will the lender NOT be taking into consideration for the expense-to-income ratios?

Acceptable net income

Dotty is purchasing a property and is speaking with a lender about the various governmental loan programs available. Which of the following statement is TRUE?

All of these.

Eva is showing properties to a buyer-client and they mention that they must have a property that either has a fenced-in yard or will allow a fenced-in yard. What are Eva's duties to the buyer at this time?

All of these.

Faith is in a meeting with a first-time homebuyer and is explaining the home-buying process and the current market conditions. After making the appropriate agency disclosures and agreeing to a buyer agency agreement, what types of questions does Faith need to ask the buyer at this initial meeting?

All of these.

Mana is a buyer agent and is assisting a buyer in the purchase of a property. The buyer is obtaining a loan which has made it through the loan underwriting and appraisal phases of the process. What can Mana do to help the buyer prepare for the final steps in the home purchase process?

All of these.

Anya has gathered information from the buyer (after making the appropriate agency disclosures and agreeing to a buyer agency agreement) regarding their needs, desires, and financial qualifications. Which of the following statements is TRUE regarding the properties that Anya should show the buyer?

Anya must show all properties that meet the buyer's requirements.

Noelle is in process of getting prequalified for a loan to determine if her regular income is sufficient to enable her to comfortably pay the loan payment and other housing expenses as well as all other recurring debts and living expenses. When the lender is calculating the expense-to-income ratios, the lender looks at which of the following?

Both housing expense-to-income and debt-to-income ratios

June is meeting with a buyer. After making the appropriate agency disclosures and agreeing to a buyer agency agreement, she asks them various questions regarding their buying needs. What is the main reason for June to learn as much as possible about the buyer's needs and desires?

Both of these.

Nick is working with a buyer-client who is looking for a tract of land that is zoned for commercial purposes. What does Nick need to tell the buyer-client regarding zoning?

Both of these.

Once the properties the buyer wants to see have been identified by the buyer and prior to the agent scheduling the appointments, the agent needs to do which of the following?

Both of these.

What is the main reason for a buyer agent to learn as much as possible about the buyer's needs and desires after making the appropriate agency disclosures and agreeing to a buyer agency agreement?

Both of these.

Dasha has been working with Griffin as a buyer's agent. Before showing him properties, Dasha referred him to three different lenders for prequalification. Which of the following statements is TRUE regarding agents referring buyers to lenders?

Dasha is not allowed to receive either a referral free or a kickback.

Which of the following statements is TRUE regarding educating the prospective buyer about the buying process?

Education regarding the buying process is especially important with first-time homebuyers.

Karen is working with a buyer-client that is looking for land to develop just outside the city limits. In addition to checking the county zoning department, Karen needs to also check the nearby city to see if they have been granted which of the following?

Extraterritorial jurisdiction

Gaylord is a buyer agent and has been showing properties to Tabitha. She has finally found a property that she is considering making an offer on. After Gaylord completes his walk-through and before Tabitha makes her offer on the property, which of the following would MOST likely be the next service Gaylord needs to provide?

Gaylord needs to perform a comparative market analysis on the property.

Charlie is working with a buyer-client who is looking for a property in a neighborhood with a homeowners' association. Charlie needs to check many things including proper property uses. Which of the following would Charlie NOT need to check?

General zoning certificates

Gloria is meeting with a buyer to discuss the purchase of a property. Which of the following statements is TRUE regarding Gloria educating the prospective buyer about the buying process?

Gloria needs to educate especially first-time homebuyers regarding the buying process.

When a lender is calculating the expense-to-income ratios for qualifying a buyer, what income are they using?

Gross income

LaTosha is working with a buyer as a buyer's agent. Before she starts showing properties, LaTosha suggests the buyer get prequalified. Which of the following is the BEST suggestions for financially prequalifying the buyer?

LaTosha's best approach to prequalifying the buyer is to refer them to one or more lenders or mortgage brokers.

Jeremy's past client owns an old service station which is located in an area that has been rezoned for residential use only. Typically, the station may be permitted to continue to operate as a service station under which of the following?

Legal nonconforming use

Zhen has a client who owns a plant company that has several greenhouses located in an area that has just been rezoned for residential use and calls Zhen for advice. Zhen suggests that the client reach out to the local zoning department and MOST likely would find out that the company is allowed to continue operating the greenhouses under the new zoning classification called

Legal nonconforming use

Liev is affiliated with Bold Homes Realty and has been hired by Seth who is looking to purchase a property. Seth has indicated that the property will allow for a combination of uses subject to specific regulations. Which type of zoning district would Liev MOST likely be looking for?

Mixed-use district

Which of the following statements BEST describes "loan underwriting"?

Once the loan application is submitted and the LE is issued, the lending institution will evaluate the application and determine whether it will approve the loan.

Which of the following statements BEST describes the importance of the buyer getting a financial prequalification?

Prequalifying a prospective buyer is important because the buyer needs to be aware of the maximum loan amount they can qualify for before seeing any properties.

Tonya is a real estate agent and is helping a buyer-client purchase a piece of land. If Tonya is checking the municipality master plan with the buyer-client, they will be looking at all the following items EXCEPT

Restrictive covenants

Tatiana is a buyer agent and has been showing properties to Evan for the past few weeks. They have finally found a property that he is considering making an offer on. Should Tatiana perform a comparative market analysis on the property?

Tatiana needs to perform a comparative market analysis on the property in order to advise the buyer on a probable offer price.

What does the lender mean when they state they are using a 28/36 qualifying ratio?

That 28% of the borrower's total gross monthly income can go towards monthly housing expense and 36% of the borrower's gross monthly income can go towards total monthly recurring obligations.

What does both the buyer agent and the buyer need to know about loan-to-value ratio (LTV)?

That the LTV ratio is simply a comparison of the loan amount to the appraised value of the property or the sales price, whichever is the lesser of the two.

Sally is looking for a tract of land to purchase that will allow a six-story office building and has hired a real estate firm to represent her. What does the real estate agent need to check before showing her property?

The agent needs to check the municipality's zoning department.

Freida is working with a buyer agent to purchase a residential property where she can park her police cruiser in the driveway. Prior to showing properties to Freida, what is one thing that her agent needs know about each property before she makes a showing appointment?

The agent will need to discover and disclose if there are restrictive covenants that prohibit work vehicles being parked in the driveway.

Which of the following statements is TRUE regarding loan qualification?

The borrower needs to qualify under both the total monthly recurring obligations and the monthly housing expense.

Which of the following statements is TRUE regarding financially qualifying the buyer after making the appropriate agency disclosures and agreeing to a buyer agency agreement?

The buyer agent is personally required to financially qualify the buyer or they can meet with a loan officer for formal advance loan qualification.

When the buyer agent is preparing the buyer for their meeting with a lender, what should the agent recommend the buyer do regarding their credit report or credit score?

The buyer agent should advise the buyer to obtain a copy of their credit report from at least one of the national repositories prior to applying for a loan.

Ronin is meeting with a buyer agent at their firm to discuss purchasing a property. Ronin makes the appropriate agency disclosures and obtains a buyer agency agreement. In addition to asking about various features and amenities he is looking for, the real estate agent asks about his financial situation. Which of the following statements is TRUE?

The real estate agent needs to ask about his financial situation to help determine the maximum price he is able and willing to pay for a property.

Claire is looking to buy an investment property and is meeting with a real estate agent to assist her with the process. After making the appropriate agency disclosures and agreeing to a buyer agency agreement, which of the following types of information will the real estate agent ask of Claire at their first meeting?

They will need to ask about the location Claire is considering looking in and the price range she would like to stay within.

George is affiliated with Dream Homes Realty and has a client who wants to start a church in an area that is normally marked for business activities. What could George suggest to this client?

To go to the local municipality and ask for a special-use permit

Tony is working with a buyer-client. They looked at several properties today and the buyer has narrowed his search down to two specific properties. If Tony has not already done so, what are his duties to the buyer at this point?

Tony needs to perform a thorough "walk-through" inspection/investigation of each property looking for obvious property defects.

Which of the following formulas calculates the borrower's debt ratio?

Total projected monthly debt expense divided by the verified gross monthly income.

Which of the following formulas calculates the borrower's housing expense ratio?

Total proposed monthly housing expense divided by the verified gross monthly income.

Jonathan is assisting a buyer with the purchase of a property and is discussing the various types of loans the buyer may encounter with their meeting with the lender. All of the following loan programs are governmental loans EXCEPT

conventional loans.

Billie has been working with a buyer agent to purchase a property and has decided to make an offer on the property located at 945 Scenic View Drive. Her agent is following through with the last steps in the process before she makes her offer. All of the following are common services buyer agents provide EXCEPT

hiring a licensed appraiser to assist in the offering price.

Shin is starting the home buying process. His agent suggested he reach out to a lender to obtain prequalification for a loan before looking at properties. The lender is going to look a Shin's acceptable income. All of the following would constitute acceptable income EXCEPT

income that is not reported for tax purposes.

When scheduling showing appointments and showing selected properties, the real estate agent should take into consideration all the following EXCEPT

it is not necessary for the buyer agent to keep the listing agent apprised if they are running late.

When the lender is determining the housing expense-to-income ratio, they include all of the following in the projected monthly housing expense EXCEPT

monthly car insurance premium.

Viktor is in a meeting with a lender to determine the projected monthly housing expense. The lender will be including all of the following in the calculation EXCEPT

monthly food expense.

When calculating total monthly debt, the lender will typically include all the following EXCEPT

monthly grocery and current utility bill.

The buyer receives the Loan Estimate (LE) within three days of making a loan application. All of the following information is provided on the LE EXCEPT

the LE discloses up front all the exact costs the borrower will incur at closing.

Another step in the loan process for a buyer is the property analysis or appraisal. The buyer agent can prepare the buyer for the appraisal process. All of the following are true EXCEPT

the buyer agent is allowed to provide an opinion of value on behalf of the buyer.

Samuel is affiliated with Dream Homes Realty and is meeting with a buyer at his office this afternoon. He has his buyer presentation ready including a list of questions he asks of every buyer-client he works with. All of the following questions are on his list EXCEPT

the number of loans they have obtained in the past.