National and UST Mortgage Practice
Exam 1 Questions and Answers 100%
Pass
A borrower received $1,000 per month in rental income. How much of
the income may be used to qualify the borrower for a loan?
A. $1,000
B. $800
C. $750
D. $1,250 -
[ANSWER]: C. $750
Generally, 75% of rental income may be used to qualify a borrower for a
loan. This formula is based on an industry standard that taxes, insurance,
,and maintenance costs will equal about 25% of the income that a
property generates. In this case, 75% x $1,000 = $750.
QUESTION: What is Freddie Mac's automated underwriting system
called?
A. Desktop Originator
B. Underwriter Assistant
C. Loan Product Advisor
D. AUS -
[ANSWER]: C. Loan Product Advisor
Freddie Mac's automated underwriting system is called Loan Product
Advisor (formerly known as Loan Prospector), while Fannie Mae's is
called Desktop Underwriter.
,QUESTION: Which of the following contains only items which should
be used in calculating a borrower's debt-to-income ratio?
A. Monthly rent expense on current home, credit card payment, car
insurance
B. Car payment, boat payment, child support obligations
C. Property tax payment, utility payment, cable bill
D. Mortgage insurance payment, average grocery costs, electric bill -
[ANSWER]: B. Car payment, boat payment, child support obligations
A debt-to-income ratio compares an applicant's total monthly debt to
his or her total monthly income. Total monthly debt would include
simultaneous loans, debt obligations, alimony, and child support. Typical
living expenses (e.g., utilities, health and disability insurance, food,
phone or cable bills, etc.) are not included when calculating DTI.
, QUESTION: Which of the following would NOT be required if a
mortgage company wishes to utilize electronic signatures on required
disclosures?
A. Borrowers must be given the option to receive the disclosures in
paper form
B. Borrowers must be able to withdraw their consent to receive the
disclosures electronically
C. The company must record the IP address from which the documents
were accessed
D. The company must disclose hardware and software requirements to
borrowers -
[ANSWER]: C. The company must record the IP address from which
the documents were accessed
Under the Electronic Signatures in Global and National Commerce Act
(the E-SIGN Act), before obtaining a consumer's consent, a financial
institution must provide a clear and conspicuous statement to
Exam 1 Questions and Answers 100%
Pass
A borrower received $1,000 per month in rental income. How much of
the income may be used to qualify the borrower for a loan?
A. $1,000
B. $800
C. $750
D. $1,250 -
[ANSWER]: C. $750
Generally, 75% of rental income may be used to qualify a borrower for a
loan. This formula is based on an industry standard that taxes, insurance,
,and maintenance costs will equal about 25% of the income that a
property generates. In this case, 75% x $1,000 = $750.
QUESTION: What is Freddie Mac's automated underwriting system
called?
A. Desktop Originator
B. Underwriter Assistant
C. Loan Product Advisor
D. AUS -
[ANSWER]: C. Loan Product Advisor
Freddie Mac's automated underwriting system is called Loan Product
Advisor (formerly known as Loan Prospector), while Fannie Mae's is
called Desktop Underwriter.
,QUESTION: Which of the following contains only items which should
be used in calculating a borrower's debt-to-income ratio?
A. Monthly rent expense on current home, credit card payment, car
insurance
B. Car payment, boat payment, child support obligations
C. Property tax payment, utility payment, cable bill
D. Mortgage insurance payment, average grocery costs, electric bill -
[ANSWER]: B. Car payment, boat payment, child support obligations
A debt-to-income ratio compares an applicant's total monthly debt to
his or her total monthly income. Total monthly debt would include
simultaneous loans, debt obligations, alimony, and child support. Typical
living expenses (e.g., utilities, health and disability insurance, food,
phone or cable bills, etc.) are not included when calculating DTI.
, QUESTION: Which of the following would NOT be required if a
mortgage company wishes to utilize electronic signatures on required
disclosures?
A. Borrowers must be given the option to receive the disclosures in
paper form
B. Borrowers must be able to withdraw their consent to receive the
disclosures electronically
C. The company must record the IP address from which the documents
were accessed
D. The company must disclose hardware and software requirements to
borrowers -
[ANSWER]: C. The company must record the IP address from which
the documents were accessed
Under the Electronic Signatures in Global and National Commerce Act
(the E-SIGN Act), before obtaining a consumer's consent, a financial
institution must provide a clear and conspicuous statement to
