HUD Practice Test and Correct Answers
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? ~CORRECT ANSWER~✓✓Pay
Stub
A client would like to purchase a home within one year. The client is motivated
to increase household income as a way to save for a down payment and qualify
for a loan. Which is the
best solution for the client to reach this goal? ~CORRECT ANSWER~✓✓Find a
second job
A credit report may contain which information? ~CORRECT ANSWER~✓✓The
number of accounts in collection status
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 closed credit
card accounts and has been using savings to
pay down credit card debt and collections. The client has not
been able to save much for a down payment with all the debt
payments 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? ~CORRECT ANSWER~✓✓It increases credit utilization, causing a
negative impact on the credit
score.
, Which action would a client take to improve a credit score? ~CORRECT
ANSWER~✓✓Pay delinquent accounts
A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate? ~CORRECT
ANSWER~✓✓Fair Credit Billing Act
A client shopping for a mortgage loan presents a housing counselor with an offer
from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year
fixed rate mortgage with a 20% down payment required. The counselor reviews
the client file and determines the client's credit score is 725 and the client's total
debt-to-income ratio is 20%. ~CORRECT ANSWER~✓✓"I am unable to
determine whether the loan is predatory, but I suggest you shop around with
other lending sources."
Which action should a counselor recommend a client take first after discovering
identity theft? ~CORRECT ANSWER~✓✓File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront
costs be evaluated? ~CORRECT ANSWER~✓✓When weighing housing options
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 secures a
conventional loan? ~CORRECT ANSWER~✓✓$728
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? ~CORRECT ANSWER~✓✓Pay
Stub
A client would like to purchase a home within one year. The client is motivated
to increase household income as a way to save for a down payment and qualify
for a loan. Which is the
best solution for the client to reach this goal? ~CORRECT ANSWER~✓✓Find a
second job
A credit report may contain which information? ~CORRECT ANSWER~✓✓The
number of accounts in collection status
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 closed credit
card accounts and has been using savings to
pay down credit card debt and collections. The client has not
been able to save much for a down payment with all the debt
payments 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? ~CORRECT ANSWER~✓✓It increases credit utilization, causing a
negative impact on the credit
score.
, Which action would a client take to improve a credit score? ~CORRECT
ANSWER~✓✓Pay delinquent accounts
A client does not receive a written monthly statement from the credit card
company. Which credit law could this omission violate? ~CORRECT
ANSWER~✓✓Fair Credit Billing Act
A client shopping for a mortgage loan presents a housing counselor with an offer
from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year
fixed rate mortgage with a 20% down payment required. The counselor reviews
the client file and determines the client's credit score is 725 and the client's total
debt-to-income ratio is 20%. ~CORRECT ANSWER~✓✓"I am unable to
determine whether the loan is predatory, but I suggest you shop around with
other lending sources."
Which action should a counselor recommend a client take first after discovering
identity theft? ~CORRECT ANSWER~✓✓File an identity theft report
In which situation would a client's responsibilities, recurring costs, and upfront
costs be evaluated? ~CORRECT ANSWER~✓✓When weighing housing options
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 secures a
conventional loan? ~CORRECT ANSWER~✓✓$728
