Freddie Mac - Credit Smart Exam Questions And
Answers Latest Update 2024-2025
Freddie Mac - Credit Smart
Questions with Complete Correct
Answers | Grade A+
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing payment,
which includes:
Ans: Principal, interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts.
Ans: False
The principal amount is the total amount borrowed.
Ans: True
Do lenders use gross income or net profits when calculating mortgage affordability for self-
employed borrowers?
Ans: Net profits
,Freddie Mac - Credit Smart Exam Questions And
Answers Latest Update 2024-2025
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments.
Ans: False
Having adequate cash reserves demonstrates to your lender that you have responsibly managed
your money and have savings and other assets to fall back on in case of emergency. Ans: True
Capital - or cash to close - refers to the funds you need to save in order to cover the cost of
down payment and closing costs.
Ans: True
Acceptable sources of capital include:
Ans: Funds from a family member, funds from a down payment assistance program or funds
from your savings account
Lenders consider investments to be (select all that apply):
Ans: Lenders consider investments to be IRAs, bonds, CDs, stocks and 401(k) plans.
To determine if you have adequate savings to obtain a mortgage and sustain homeownership,
lenders will average the last six months of your checking and savings account balances.
, Freddie Mac - Credit Smart Exam Questions And
Answers Latest Update 2024-2025
Ans: False
Lenders consider four primary factors when determining whether to approve a loan - the 4 C's
of lending. What are they?
Ans: Credit, Capacity, Capital and Collateral
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments.
Ans: True
Lenders generally don't have any guidelines or restrictions when it comes to the home you
want to purchase or its condition, provided you have good credit.
Ans: False
The home inspection is ordered through the lender and determines the market value of the
home.
Ans: False
Manufactured homes are the same as mobile homes and don't need to meet federal
construction and safety standards.
Answers Latest Update 2024-2025
Freddie Mac - Credit Smart
Questions with Complete Correct
Answers | Grade A+
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing payment,
which includes:
Ans: Principal, interest, property taxes, homeowner's insurance, mortgage insurance,
homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all
other outstanding debts.
Ans: False
The principal amount is the total amount borrowed.
Ans: True
Do lenders use gross income or net profits when calculating mortgage affordability for self-
employed borrowers?
Ans: Net profits
,Freddie Mac - Credit Smart Exam Questions And
Answers Latest Update 2024-2025
An escrow account is a special account managed by the borrower that holds funds for
property taxes and property insurance payments.
Ans: False
Having adequate cash reserves demonstrates to your lender that you have responsibly managed
your money and have savings and other assets to fall back on in case of emergency. Ans: True
Capital - or cash to close - refers to the funds you need to save in order to cover the cost of
down payment and closing costs.
Ans: True
Acceptable sources of capital include:
Ans: Funds from a family member, funds from a down payment assistance program or funds
from your savings account
Lenders consider investments to be (select all that apply):
Ans: Lenders consider investments to be IRAs, bonds, CDs, stocks and 401(k) plans.
To determine if you have adequate savings to obtain a mortgage and sustain homeownership,
lenders will average the last six months of your checking and savings account balances.
, Freddie Mac - Credit Smart Exam Questions And
Answers Latest Update 2024-2025
Ans: False
Lenders consider four primary factors when determining whether to approve a loan - the 4 C's
of lending. What are they?
Ans: Credit, Capacity, Capital and Collateral
Derogatory information on your credit report may include: collections, judgements,
bankruptcies and/or late payments.
Ans: True
Lenders generally don't have any guidelines or restrictions when it comes to the home you
want to purchase or its condition, provided you have good credit.
Ans: False
The home inspection is ordered through the lender and determines the market value of the
home.
Ans: False
Manufactured homes are the same as mobile homes and don't need to meet federal
construction and safety standards.
