Freddie Mac - Credit Smart 2025/2026
Exam Questions with 100% Correct
1
Answers | Latest Update
The percentage of your gross monthly income that goes toward paying for
your housing expenses is called the "housing expense ratio" and is based
on the total housing payment, which includes: - 🧠 ANSWER ✔✔Principal,
interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income
ratio, only all other outstanding debts. - 🧠 ANSWER ✔✔False
The principal amount is the total amount borrowed. - 🧠 ANSWER ✔✔True
Do lenders use gross income or net profits when calculating mortgage
affordability for self-employed borrowers? - 🧠 ANSWER ✔✔Net profits
An escrow account is a special account managed by the borrower that
holds funds for property taxes and property insurance payments. - 🧠
ANSWER ✔✔False
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,Having adequate cash reserves demonstrates to your lender that you have
responsibly managed your money and have savings and other assets to fall
2
back on in case of emergency. - 🧠 ANSWER ✔✔True
Capital - or cash to close - refers to the funds you need to save in order to
cover the cost of down payment and closing costs. - 🧠 ANSWER ✔✔True
Acceptable sources of capital include: - 🧠 ANSWER ✔✔Funds from a
family member, funds from a down payment assistance program or funds
from your savings account
Lenders consider investments to be (select all that apply): - 🧠 ANSWER
✔✔Lenders consider investments to be IRAs, bonds, CDs, stocks and
401(k) plans.
To determine if you have adequate savings to obtain a mortgage and
sustain homeownership, lenders will average the last six months of your
checking and savings account balances. - 🧠 ANSWER ✔✔False
Lenders consider four primary factors when determining whether to
approve a loan - the 4 C's of lending. What are they? - 🧠 ANSWER
✔✔Credit, Capacity, Capital and Collateral
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, Derogatory information on your credit report may include: collections,
judgements, bankruptcies and/or late payments. - 🧠 ANSWER ✔✔True
3
Lenders generally don't have any guidelines or restrictions when it comes
to the home you want to purchase or its condition, provided you have good
credit. - 🧠 ANSWER ✔✔False
The home inspection is ordered through the lender and determines the
market value of the home. - 🧠 ANSWER ✔✔False
Manufactured homes are the same as mobile homes and don't need to
meet federal construction and safety standards. - 🧠 ANSWER ✔✔False
If you make extra payments on your loan, that can help pay down the
principal faster and thus greatly reduce the interest due on the loan. - 🧠
ANSWER ✔✔True
Government insured loans, such as FHA loans, are the only low down
payment mortgages available to homebuyers. - 🧠 ANSWER ✔✔False
A fixed-rate mortgage is a loan where the interest rate stays the same for
the life of the loan. - 🧠 ANSWER ✔✔True
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
Exam Questions with 100% Correct
1
Answers | Latest Update
The percentage of your gross monthly income that goes toward paying for
your housing expenses is called the "housing expense ratio" and is based
on the total housing payment, which includes: - 🧠 ANSWER ✔✔Principal,
interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income
ratio, only all other outstanding debts. - 🧠 ANSWER ✔✔False
The principal amount is the total amount borrowed. - 🧠 ANSWER ✔✔True
Do lenders use gross income or net profits when calculating mortgage
affordability for self-employed borrowers? - 🧠 ANSWER ✔✔Net profits
An escrow account is a special account managed by the borrower that
holds funds for property taxes and property insurance payments. - 🧠
ANSWER ✔✔False
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,Having adequate cash reserves demonstrates to your lender that you have
responsibly managed your money and have savings and other assets to fall
2
back on in case of emergency. - 🧠 ANSWER ✔✔True
Capital - or cash to close - refers to the funds you need to save in order to
cover the cost of down payment and closing costs. - 🧠 ANSWER ✔✔True
Acceptable sources of capital include: - 🧠 ANSWER ✔✔Funds from a
family member, funds from a down payment assistance program or funds
from your savings account
Lenders consider investments to be (select all that apply): - 🧠 ANSWER
✔✔Lenders consider investments to be IRAs, bonds, CDs, stocks and
401(k) plans.
To determine if you have adequate savings to obtain a mortgage and
sustain homeownership, lenders will average the last six months of your
checking and savings account balances. - 🧠 ANSWER ✔✔False
Lenders consider four primary factors when determining whether to
approve a loan - the 4 C's of lending. What are they? - 🧠 ANSWER
✔✔Credit, Capacity, Capital and Collateral
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, Derogatory information on your credit report may include: collections,
judgements, bankruptcies and/or late payments. - 🧠 ANSWER ✔✔True
3
Lenders generally don't have any guidelines or restrictions when it comes
to the home you want to purchase or its condition, provided you have good
credit. - 🧠 ANSWER ✔✔False
The home inspection is ordered through the lender and determines the
market value of the home. - 🧠 ANSWER ✔✔False
Manufactured homes are the same as mobile homes and don't need to
meet federal construction and safety standards. - 🧠 ANSWER ✔✔False
If you make extra payments on your loan, that can help pay down the
principal faster and thus greatly reduce the interest due on the loan. - 🧠
ANSWER ✔✔True
Government insured loans, such as FHA loans, are the only low down
payment mortgages available to homebuyers. - 🧠 ANSWER ✔✔False
A fixed-rate mortgage is a loan where the interest rate stays the same for
the life of the loan. - 🧠 ANSWER ✔✔True
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
