HUD PRACTICE TEST QUESTIONS AND VERIFIED SOLUTIONS 2024/2025 GRADED A+.

1. Which document is most important when working with a client to developan initial budget as part of a Client Action Plan?: Pay Stub 2. A client would like to purchase a home within one year. The client is moti- vated to increase household income as a way to save for a down payment andqualify for a loan.Which is the best solution for the client to reach this goal?: Find a second job 3. A credit report may contain which information?: The number of accounts incollection status 4. Six months ago a client left a job as a reporter to start a business in the retail industry.To prepare to buy a house, the client closedcredit card accounts and has been using savings to pay down credit card debt and collections. The client has notbeen able to save much for a down payment with all the debtpayments but knows about an affordable homeownership program that only requires a 1% down payment with an FHA loan.What might result from the client closing the credit card accounts?: It increases credit utilization, causing a negative impact on the creditscore. 5. Which action would a client take to improve a credit score?: Pay delinquentaccounts 6. A client does not receive a written monthly statement from the credit cardcompany.Which credit law could this omission violate?: Fair Credit Billing Act 7. A clientshopping for a mortgage loan presents a housing counselor with anoffer from a local mortgage lender. The interest rate on the offer is 7.5% for a30-year fixed rate mortgage with a 20%down payment required.The counselorreviews the client file and determines the client's credit score is 725 and the client's total debt-to-income ratio is 20%.: "I am unable to determine whether theloan is predatory, but I suggest you shop around with other lending sources." 3 / 7 8. Which action should a counselor recommend a client take first after discov-ering identity theft?: File an identity theft report 9. In which situation would a client's responsibilities, recurring costs, andupfront costs be evaluated?: When weighing housing options 10. A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the client can afford based on income if the client securesa conventional loan?: $728 11. Which type of government insured loan was created for financing homesin rural areas?: USDA 12. A client keeps having budget problems due to unexpected expenses. Which financial tool would best assist this client to prepare for unexpectedexpenses and avoid increasing credit usage?: Emergency Funds 13. A client has a monthly household income of $2,300, monthly debt pay-ments of $450, and an optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment?: $736 Use Front-End Ratio 14. What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total of $88 in other consumer debt payments, and a gross household income of $4,460 per month (rounded to the nearest wholepercent)?: 30% 15. A client earns a salary of $45,000 at a job held for three years. The client has credit card bills, student loans, and a car loan totaling $500 per month. The client has already saved $3,500 for a down payment and is using an FHAEnergy Efficient Mortgage (EEM). If the client wants to make the minimum down payment for a home priced at $150,000, how much more does the client