HUD Practice Test Quizzes and Correct
Answers/ 2024-2025.
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: Pay Stub
A client would like to purchase a home within one year. The client is motivated to
increase household income as a way to save for a down payment and qualify for a
loan. Which is the
best solution for the client to reach this goal? - Answer: Find a second job
A credit report may contain which information? - Answer: The number of
accounts in collection status
Six months ago a client left a job as a reporter to start a
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, business in the retail industry. To prepare to buy a house, the client closed credit
card accounts and has been using savings to
pay down credit card debt and collections. The client has not
been able to save much for a down payment with all the debt
payments but knows about an affordable homeownership
program that only requires a 1% down payment with an FHA
loan. What might result from the client closing the credit card
accounts? - Answer: It increases credit utilization, causing a negative impact on
the credit
score.
Which action would a client take to improve a credit score? - Answer: Pay
delinquent accounts
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
A client shopping for a mortgage loan presents a housing counselor with an offer
from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year
fixed rate mortgage with a 20% down payment required. The counselor reviews
the client file and determines the client's credit score is 725 and the client's total
debt-to-income ratio is 20%. - Answer: "I am unable to determine whether the
loan is predatory, but I suggest you shop around with other lending sources."
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Answers/ 2024-2025.
Which document is most important when working with a client to develop an
initial budget as part of a Client Action Plan? - Answer: Pay Stub
A client would like to purchase a home within one year. The client is motivated to
increase household income as a way to save for a down payment and qualify for a
loan. Which is the
best solution for the client to reach this goal? - Answer: Find a second job
A credit report may contain which information? - Answer: The number of
accounts in collection status
Six months ago a client left a job as a reporter to start a
Page 1 of 15
, business in the retail industry. To prepare to buy a house, the client closed credit
card accounts and has been using savings to
pay down credit card debt and collections. The client has not
been able to save much for a down payment with all the debt
payments but knows about an affordable homeownership
program that only requires a 1% down payment with an FHA
loan. What might result from the client closing the credit card
accounts? - Answer: It increases credit utilization, causing a negative impact on
the credit
score.
Which action would a client take to improve a credit score? - Answer: Pay
delinquent accounts
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
A client shopping for a mortgage loan presents a housing counselor with an offer
from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year
fixed rate mortgage with a 20% down payment required. The counselor reviews
the client file and determines the client's credit score is 725 and the client's total
debt-to-income ratio is 20%. - Answer: "I am unable to determine whether the
loan is predatory, but I suggest you shop around with other lending sources."
Page 2 of 15
