HUD Exam - Housing Affordability | Questions with 100% Correct Answers | Verified | Latest Update 2024

All of the following are true statements about upfront costs associated with renting and buying, except; A. Renters generally pay a security deposit upon signing a lease. B. The average cost due upon signing a lease for a rental is typically between 20% of the monthly rent.. C. Closing costs are typically comprised of lender fees, discount points, title insurance, home inspection fees, escrow deposit, property taxes, private mortgage insurance, and attorney's fees. D. A client who desires to p - B. The average costs due upon signing a lease for a rental is typically 20% of the monthly rent. -This statement is not true. However, the figure of 20% is relevant for those considering buying a home (down payment). A couple, the Smiths, recently scheduled a meeting with Rebecca. They have owned their home for seven years and have accumulated some equity in the home. However, they are now struggling to pay their mortgage, because the wife left her full-time job when she had a baby. Her husband's salary is paid in installments of $900 a week, which are subject to deductions and other withholdings. Each month, they pay $1,000 in principal and interest, $110 for taxes, $130 for insurance, and $20 in homeowners - 32% Formula: Gross monthly income = Total weekly pay before deuctions x 52 / 12 Front end ratio = Monthly housing expenses / Gross monthly Income. One option that Rebecca suggests to the Smiths is to sell their home and rent a home that is smaller and more affordable. If the Smiths decide to do this, they will no longer have a mortgage, so what is the maximum amount that they can afford to pay in rent and renters insurance each month? Tip: Recall that the husband 's salary is paid in installments of $900 a week, which are subject to deductions and other withholdings. - $1,170 If the Smiths sell their home and purchase a more affordable property, what is the maximum amount that is affordable for the Smiths to pay in PITIA each month if they obtained a conventional loan? Tip: Recall that the husband 's salary is paid in installments of $900 a week, which are subject to deductions and other withholdings - $1,092