Freddie Mac - Credit Smart Test Questions and Answers Rated A
The percentage of your gross monthly income ANSWER -Funds from a family member,
that goes toward paying for your housing funds from a down payment assistance program
expenses is called the "housing expense ratio" or funds from your savings account
and is based on the total housing payment,
which includes: - ANSWER -Principal,
interest, property taxes, homeowner's insurance, Lenders consider investments to be (select all
mortgage insurance, homeowner's or condo that apply): - ANSWER -Lenders consider
association fees investments to be IRAs, bonds, CDs, stocks and
401(k) plans.
Lenders don't include your future housing
payment in your debt-to-income ratio, only all To determine if you have adequate savings to
other outstanding debts. - ANSWER -False obtain a mortgage and sustain homeownership,
lenders will average the last six months of your
checking and savings account balances. -
The principal amount is the total amount ANSWER -False
borrowed. - ANSWER -True
Lenders consider four primary factors when
Do lenders use gross income or net profits when determining whether to approve a loan - the 4 C's
calculating mortgage affordability for self- of lending. What are they? - ANSWER -
employed borrowers? - ANSWER -Net Credit, Capacity, Capital and Collateral
profits
Derogatory information on your credit report may
An escrow account is a special account include: collections, judgements, bankruptcies
managed by the borrower that holds funds for and/or late payments. - ANSWER -True
property taxes and property insurance payments.
- ANSWER -False
Lenders generally don't have any guidelines or
restrictions when it comes to the home you want
Having adequate cash reserves demonstrates to to purchase or its condition, provided you have
your lender that you have responsibly managed good credit. - ANSWER -False
your money and have savings and other assets
to fall back on in case of emergency. -
ANSWER -True The home inspection is ordered through the
lender and determines the market value of the
home. - ANSWER -False
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. - ANSWER - Manufactured homes are the same as mobile
True homes and don't need to meet federal
construction and safety standards. -
ANSWER -False
Acceptable sources of capital include: -
1/7
, Freddie Mac - Credit Smart Test Questions and Answers Rated A
If you make extra payments on your loan, that
can help pay down the principal faster and thus You will need to repay the seller any property or
greatly reduce the interest due on the loan. - school taxes that they have already paid on the
ANSWER -True property. - ANSWER -True
Government insured loans, such as FHA loans, LTV stands for loan-to-value and indicates the
are the only low down payment mortgages amount of the loan you owe as a percentage of
available to homebuyers. - ANSWER - the value of the property. - ANSWER -True
False
The Annual Percentage Rate (APR) is the same
A fixed-rate mortgage is a loan where the interest as the interest rate. - ANSWER -False
rate stays the same for the life of the loan. -
ANSWER -True
The mortgage loan process occurs in the
following order: - ANSWER -Pre-
Which of the following loans are guaranteed by qualification or pre-approval, loan application,
the federal government (select all that apply): - loan processing, loan underwriting, loan approval
ANSWER -VA, USDA, FHA or denial.
There may be special loan products and first- Making pre-payments (also called principal-only
time homebuyer or affordable homeownership payments) can help you pay off your loan sooner
programs available in your community and it's and potentially save you thousands of dollars in
worth calling your local lenders, credit unions and interest payments. - ANSWER -True
housing counseling agencies to find out about
your options. - ANSWER -True
If a lender denies your loan, they're required by
law to provide the applicant with an explanation
What percentage of the purchase price is and share the credit score they used to make the
required as a down payment for conventional lending decision. - ANSWER -True
conforming loans to avoid paying private
mortgage insurance? - ANSWER -20%
Select all that apply. If you can't qualify for a loan
on your own, you may have other options,
Private mortgage insurance protects the including: - ANSWER ---Finding a co-
borrower if they can't make their mortgage signer.
payment. - ANSWER -False --Getting gift funds from a family member.
--Speaking with a HUD-certified housing
counselor to create an action plan for resolving
It's okay to borrow money from a family member key financial issues.
for your down payment, as long as you pay the
family member back. - ANSWER -False
2/7
The percentage of your gross monthly income ANSWER -Funds from a family member,
that goes toward paying for your housing funds from a down payment assistance program
expenses is called the "housing expense ratio" or funds from your savings account
and is based on the total housing payment,
which includes: - ANSWER -Principal,
interest, property taxes, homeowner's insurance, Lenders consider investments to be (select all
mortgage insurance, homeowner's or condo that apply): - ANSWER -Lenders consider
association fees investments to be IRAs, bonds, CDs, stocks and
401(k) plans.
Lenders don't include your future housing
payment in your debt-to-income ratio, only all To determine if you have adequate savings to
other outstanding debts. - ANSWER -False obtain a mortgage and sustain homeownership,
lenders will average the last six months of your
checking and savings account balances. -
The principal amount is the total amount ANSWER -False
borrowed. - ANSWER -True
Lenders consider four primary factors when
Do lenders use gross income or net profits when determining whether to approve a loan - the 4 C's
calculating mortgage affordability for self- of lending. What are they? - ANSWER -
employed borrowers? - ANSWER -Net Credit, Capacity, Capital and Collateral
profits
Derogatory information on your credit report may
An escrow account is a special account include: collections, judgements, bankruptcies
managed by the borrower that holds funds for and/or late payments. - ANSWER -True
property taxes and property insurance payments.
- ANSWER -False
Lenders generally don't have any guidelines or
restrictions when it comes to the home you want
Having adequate cash reserves demonstrates to to purchase or its condition, provided you have
your lender that you have responsibly managed good credit. - ANSWER -False
your money and have savings and other assets
to fall back on in case of emergency. -
ANSWER -True The home inspection is ordered through the
lender and determines the market value of the
home. - ANSWER -False
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. - ANSWER - Manufactured homes are the same as mobile
True homes and don't need to meet federal
construction and safety standards. -
ANSWER -False
Acceptable sources of capital include: -
1/7
, Freddie Mac - Credit Smart Test Questions and Answers Rated A
If you make extra payments on your loan, that
can help pay down the principal faster and thus You will need to repay the seller any property or
greatly reduce the interest due on the loan. - school taxes that they have already paid on the
ANSWER -True property. - ANSWER -True
Government insured loans, such as FHA loans, LTV stands for loan-to-value and indicates the
are the only low down payment mortgages amount of the loan you owe as a percentage of
available to homebuyers. - ANSWER - the value of the property. - ANSWER -True
False
The Annual Percentage Rate (APR) is the same
A fixed-rate mortgage is a loan where the interest as the interest rate. - ANSWER -False
rate stays the same for the life of the loan. -
ANSWER -True
The mortgage loan process occurs in the
following order: - ANSWER -Pre-
Which of the following loans are guaranteed by qualification or pre-approval, loan application,
the federal government (select all that apply): - loan processing, loan underwriting, loan approval
ANSWER -VA, USDA, FHA or denial.
There may be special loan products and first- Making pre-payments (also called principal-only
time homebuyer or affordable homeownership payments) can help you pay off your loan sooner
programs available in your community and it's and potentially save you thousands of dollars in
worth calling your local lenders, credit unions and interest payments. - ANSWER -True
housing counseling agencies to find out about
your options. - ANSWER -True
If a lender denies your loan, they're required by
law to provide the applicant with an explanation
What percentage of the purchase price is and share the credit score they used to make the
required as a down payment for conventional lending decision. - ANSWER -True
conforming loans to avoid paying private
mortgage insurance? - ANSWER -20%
Select all that apply. If you can't qualify for a loan
on your own, you may have other options,
Private mortgage insurance protects the including: - ANSWER ---Finding a co-
borrower if they can't make their mortgage signer.
payment. - ANSWER -False --Getting gift funds from a family member.
--Speaking with a HUD-certified housing
counselor to create an action plan for resolving
It's okay to borrow money from a family member key financial issues.
for your down payment, as long as you pay the
family member back. - ANSWER -False
2/7
