MOCK EXAM REVIEW QUESTIONS &
ACCURATE ANSWERS PASSED 100%
(T or F): If a borrower tells you about a liability that is not listed on the credit report, it
doesn't need to be included on the loan application. - Correct Answer ✔✔ False
What is the maximum seller contribution allowed for a primary residence below 75%
LTV? (FNMA/FHLMC) - Correct Answer ✔✔ 9%
(T or F) DU does not consider non-occupant income as qualifying income - Correct
Answer ✔✔ True
(T or F) HOA dues are included in the PITI calculation. - Correct Answer ✔✔ False
Using the following information, answer the following conventional financed MI loan
question.
Sales Price = $185,000
Down Payment = 10%
Credit Score = 635
20-year Fixed
Owner-occupied
What is the Total Loan Amount and MI Factor? - Correct Answer ✔✔ $169,247/1.65%
How many days must a borrower wait to close once they receive their initial
disclosures? - Correct Answer ✔✔ 7
(T or F) The maximum LTV for an FHA cash-out refinance is 80%. - Correct Answer ✔✔
True
Based on the following scenario, does the borrower qualify within the FHLMC
guidelines?
PITI: $1,375 monthly
Income: $4,950 monthly
Debt: $350 car payment, $420 student loan ($4,500 balance), $75 credit card payments
($850 balance). - Correct Answer ✔✔ No
(T or F) A sole proprietor's net profit or loss can be located on Schedule C of their
personal tax return - Correct Answer ✔✔ True
(T or F) When using automated underwriting for a FNMA loan, DU will determine the
borrower's reverse requirement for an investment property. - Correct Answer ✔✔ True
, (T or F) 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
- Correct Answer ✔✔ True
The maximum allowable ratios for an owner-occupant when using a non-occupant co-
borrower per FHLMC guidelines is _______. - Correct Answer ✔✔ 35/43
(T or F) A borrower paid semi-monthly and a borrower paid bi-weekly have the same
number of pay periods per year. - Correct Answer ✔✔ False
(T or F) A borrower must qualify at the note rate on a temporary buydown, not the start
rate. - Correct Answer ✔✔ True
(T or F) 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.
- Correct Answer ✔✔ False
Your borrower receives quarterly bonuses and wants to pay down their mortgage. Their
current balance is $289,900 and their interest rate is 6.625% on an interest-only loan.
What is their new monthly payment if they pay $30,000 towards the principal balance? -
Correct Answer ✔✔ $1,434.87
(T or F) Loan Product Advisor (LPA) is one of the most widely used automated
underwriting systems in the mortgage industry. - Correct Answer ✔✔ True
(T or F) 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. - Correct Answer ✔✔ True
Using the information provided, answer the following FHA question:
Sales Price = $245,600
Interest Rate = 4.25%
30-year Fixed
Taxes = 1.5%
Homeowners Insurance = .3%
What is the PITI? - Correct Answer ✔✔ ???
(T or F) A 3-Year ARM adjusts every 3 years. - Correct Answer ✔✔ True
(T or F) HOA dues should be added to the PITI for the purpose of calculation ratios
when qualifying a borrower. - Correct Answer ✔✔ True
(T or F) A Loan Officer can locate the summary of eligibility requirements for a loan to
be sold to a specific lender/investor in the lender specs. - Correct Answer ✔✔ False
ACCURATE ANSWERS PASSED 100%
(T or F): If a borrower tells you about a liability that is not listed on the credit report, it
doesn't need to be included on the loan application. - Correct Answer ✔✔ False
What is the maximum seller contribution allowed for a primary residence below 75%
LTV? (FNMA/FHLMC) - Correct Answer ✔✔ 9%
(T or F) DU does not consider non-occupant income as qualifying income - Correct
Answer ✔✔ True
(T or F) HOA dues are included in the PITI calculation. - Correct Answer ✔✔ False
Using the following information, answer the following conventional financed MI loan
question.
Sales Price = $185,000
Down Payment = 10%
Credit Score = 635
20-year Fixed
Owner-occupied
What is the Total Loan Amount and MI Factor? - Correct Answer ✔✔ $169,247/1.65%
How many days must a borrower wait to close once they receive their initial
disclosures? - Correct Answer ✔✔ 7
(T or F) The maximum LTV for an FHA cash-out refinance is 80%. - Correct Answer ✔✔
True
Based on the following scenario, does the borrower qualify within the FHLMC
guidelines?
PITI: $1,375 monthly
Income: $4,950 monthly
Debt: $350 car payment, $420 student loan ($4,500 balance), $75 credit card payments
($850 balance). - Correct Answer ✔✔ No
(T or F) A sole proprietor's net profit or loss can be located on Schedule C of their
personal tax return - Correct Answer ✔✔ True
(T or F) When using automated underwriting for a FNMA loan, DU will determine the
borrower's reverse requirement for an investment property. - Correct Answer ✔✔ True
, (T or F) 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
- Correct Answer ✔✔ True
The maximum allowable ratios for an owner-occupant when using a non-occupant co-
borrower per FHLMC guidelines is _______. - Correct Answer ✔✔ 35/43
(T or F) A borrower paid semi-monthly and a borrower paid bi-weekly have the same
number of pay periods per year. - Correct Answer ✔✔ False
(T or F) A borrower must qualify at the note rate on a temporary buydown, not the start
rate. - Correct Answer ✔✔ True
(T or F) 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.
- Correct Answer ✔✔ False
Your borrower receives quarterly bonuses and wants to pay down their mortgage. Their
current balance is $289,900 and their interest rate is 6.625% on an interest-only loan.
What is their new monthly payment if they pay $30,000 towards the principal balance? -
Correct Answer ✔✔ $1,434.87
(T or F) Loan Product Advisor (LPA) is one of the most widely used automated
underwriting systems in the mortgage industry. - Correct Answer ✔✔ True
(T or F) 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. - Correct Answer ✔✔ True
Using the information provided, answer the following FHA question:
Sales Price = $245,600
Interest Rate = 4.25%
30-year Fixed
Taxes = 1.5%
Homeowners Insurance = .3%
What is the PITI? - Correct Answer ✔✔ ???
(T or F) A 3-Year ARM adjusts every 3 years. - Correct Answer ✔✔ True
(T or F) HOA dues should be added to the PITI for the purpose of calculation ratios
when qualifying a borrower. - Correct Answer ✔✔ True
(T or F) A Loan Officer can locate the summary of eligibility requirements for a loan to
be sold to a specific lender/investor in the lender specs. - Correct Answer ✔✔ False
