HUD Practice Exam Questions And Answers

What act came about after the assassination of MLK? - Answer- The Civil Rights Act of 1968 A client does not receive a written monthly statement from the credit card company. Which credit law could this omission violate? - Answer- Fair Credit Billing Act In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated? - 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? - Answer- Answer is 728. 40x15=_x52_/12=_.28=728 Front end ratio for Conventional Loan - Answer- 28% Back End ratio - Answer- Only calculate if you have expenses in the problem. Only include debts that appear on Credit report. If they say Debt to income ratio : - Answer- they are looking for Back End Ratio If it says housing ratio : - Answer- Calculate front end If they say "What is the highest monthly mortgage payment" and they give you expenses: - Answer- You do both front & back end & choose the lowest total A client has a monthly household income of $2,300, monthly debt payments of $450, and an optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment? - Answer- 2300-450=_X.32=592 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 whole percent)? - Answer- ANSWER IS 30% 1250+88/4460 How to solve for back end ratio - Answer- back end ratio = total monthly debt expenses/ gross monthly income 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 FHA Energy Efficient Mortgage (EEM).If the client