XINNIX GROUND SCHOOL COMPREHENSIVE EXAM
UPDATED QUESTIONS AND SOLUTIONS RATED A+
✔✔Income or losses derived from partnerships can be located on Schedule K-1 of a
borrower's personal tax return. - ✔✔False
✔✔If a borrower tell you about a liability that is not listed on the credit report, it doesn't
need to be included on the loan application - ✔✔False
✔✔A liability not listed on the credit report will typically need to be included on the loan
application. - ✔✔True
✔✔The borrower does not want their P&I payments to go above $1,250 per month on a
30-year term. With an interest rate of 6.5 what is the maximum loan amount for this
borrower? (Round to the nearest 50) - ✔✔$197,750 (Hint: type in what you know)
✔✔Based on the following scenario, what is the borrower's qualifying ratios under
FHLMC guidelines?
PITI: $3,350
Income: $8,350
Debt: $595 car payment - ✔✔40.12/47.25 (Hint: PITI/Income and PITI + Debt/Income)
✔✔Using the information provided, answer the following FHA question: Sales Price =
137,300 Interest rate = 6.875% 30 Year fixed Taxes = 1.5% Homeowners Insurance
=.3% What is the PITI? - ✔✔(Awaiting answer)
✔✔Which type of letter would be best for a borrower who has made an offer on a
property and has provided their pay stubs, bank statements and W2s? -
✔✔Commitment letter
✔✔What is the qualifying rate for a 3/1 Arm with a note rate of 4.25% and 2/6 caps?
The fully-indexed rate is 6.36%. - ✔✔6.38% (start rate + 2% or Fully indexed rate,
whichever is greatest if Arm is 5 years or less, if greater than 5 years then its start rate)
✔✔What is the largest house payment Ms. Joyce can have with her current income of
$92,650 per year considering she has a $525 car payment and $0 in credit cards?
(FHLMC) - ✔✔$2,161.83
✔✔The following repairs are allowed under the FHA 203(k) Standard program.
(Minimum $5,000 in repairs) - ✔✔Roof replacement, installing or repairing fencing,
interior and exterior painting
, ✔✔Using the information provided, answer the following cash-out question using
FNMA: (do NOT round the loan down)
Value = $350,000
Current Balance = $228,000
Current payment = $1,920
Cash requested = $20,000
Taxes = $270 monthly
Homeowners insurance = $75 monthly
Closing Cost = 2.5%
Prepaids = 1%
What is their new loan amount and proposed monthly payment (PITI) based on a 30
year fixed rate of 6.375%? - ✔✔(course 5 Lesson 6)
✔✔What is the borrower reserve requirement, using manual underwriting, for an
investment property? (FHLMC) - ✔✔6 months PITI for subject property and 2 months
for each additional property (except for primary residence)
✔✔HOA dues should be added to the PITI for the purpose of calculating ratios when
qualifying a borrower. - ✔✔True
✔✔When considering a FHLMC loan, the maximum allowable ratios for the owner
occupant when using a non-occupant co-borrower are 35/43. - ✔✔True
✔✔A borrower who has made an offer on a property, but has not yet provided their
paystubs, bank statements and W2s would be issued which letter? - ✔✔Pre-
Qualification Letter (Hint: Not worth the paper its on)
✔✔How long does a consumer have to shop for a mortgage without the credit inquiries
affecting their score? - ✔✔30 days
✔✔What is the maximum seller contribution allowed for a primary residence at 85%
LTV? (FNMA/FHLMC) - ✔✔1. 9% of value for mortgages with LTV ratios of less than or
equal to 75%
2. 6% of value for mortgages with LTV ratios greater than 75% up to and including 90%
3. 3% of value for mortgages with LTV ratios greater than 90%
✔✔A borrower is considering a 1-year ARM with a note rate of 4.25% 2/6 caps and a
margin of 2.5% What would the borrower's interest rate be for year 2 if the index is at
4.25%? - ✔✔6.25% (higher of start rate +2% or fully indexed rate)
UPDATED QUESTIONS AND SOLUTIONS RATED A+
✔✔Income or losses derived from partnerships can be located on Schedule K-1 of a
borrower's personal tax return. - ✔✔False
✔✔If a borrower tell you about a liability that is not listed on the credit report, it doesn't
need to be included on the loan application - ✔✔False
✔✔A liability not listed on the credit report will typically need to be included on the loan
application. - ✔✔True
✔✔The borrower does not want their P&I payments to go above $1,250 per month on a
30-year term. With an interest rate of 6.5 what is the maximum loan amount for this
borrower? (Round to the nearest 50) - ✔✔$197,750 (Hint: type in what you know)
✔✔Based on the following scenario, what is the borrower's qualifying ratios under
FHLMC guidelines?
PITI: $3,350
Income: $8,350
Debt: $595 car payment - ✔✔40.12/47.25 (Hint: PITI/Income and PITI + Debt/Income)
✔✔Using the information provided, answer the following FHA question: Sales Price =
137,300 Interest rate = 6.875% 30 Year fixed Taxes = 1.5% Homeowners Insurance
=.3% What is the PITI? - ✔✔(Awaiting answer)
✔✔Which type of letter would be best for a borrower who has made an offer on a
property and has provided their pay stubs, bank statements and W2s? -
✔✔Commitment letter
✔✔What is the qualifying rate for a 3/1 Arm with a note rate of 4.25% and 2/6 caps?
The fully-indexed rate is 6.36%. - ✔✔6.38% (start rate + 2% or Fully indexed rate,
whichever is greatest if Arm is 5 years or less, if greater than 5 years then its start rate)
✔✔What is the largest house payment Ms. Joyce can have with her current income of
$92,650 per year considering she has a $525 car payment and $0 in credit cards?
(FHLMC) - ✔✔$2,161.83
✔✔The following repairs are allowed under the FHA 203(k) Standard program.
(Minimum $5,000 in repairs) - ✔✔Roof replacement, installing or repairing fencing,
interior and exterior painting
, ✔✔Using the information provided, answer the following cash-out question using
FNMA: (do NOT round the loan down)
Value = $350,000
Current Balance = $228,000
Current payment = $1,920
Cash requested = $20,000
Taxes = $270 monthly
Homeowners insurance = $75 monthly
Closing Cost = 2.5%
Prepaids = 1%
What is their new loan amount and proposed monthly payment (PITI) based on a 30
year fixed rate of 6.375%? - ✔✔(course 5 Lesson 6)
✔✔What is the borrower reserve requirement, using manual underwriting, for an
investment property? (FHLMC) - ✔✔6 months PITI for subject property and 2 months
for each additional property (except for primary residence)
✔✔HOA dues should be added to the PITI for the purpose of calculating ratios when
qualifying a borrower. - ✔✔True
✔✔When considering a FHLMC loan, the maximum allowable ratios for the owner
occupant when using a non-occupant co-borrower are 35/43. - ✔✔True
✔✔A borrower who has made an offer on a property, but has not yet provided their
paystubs, bank statements and W2s would be issued which letter? - ✔✔Pre-
Qualification Letter (Hint: Not worth the paper its on)
✔✔How long does a consumer have to shop for a mortgage without the credit inquiries
affecting their score? - ✔✔30 days
✔✔What is the maximum seller contribution allowed for a primary residence at 85%
LTV? (FNMA/FHLMC) - ✔✔1. 9% of value for mortgages with LTV ratios of less than or
equal to 75%
2. 6% of value for mortgages with LTV ratios greater than 75% up to and including 90%
3. 3% of value for mortgages with LTV ratios greater than 90%
✔✔A borrower is considering a 1-year ARM with a note rate of 4.25% 2/6 caps and a
margin of 2.5% What would the borrower's interest rate be for year 2 if the index is at
4.25%? - ✔✔6.25% (higher of start rate +2% or fully indexed rate)
