HUD Practice Exam

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- Which action would a client take to improve a credit score? -ANSWER- A client does not receive a written monthly statement from the credit card company. Which credit law could this omission violate? -ANSWER- FCBA 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%. The client asks the housing counselor if the offer is a case of illegal predatory lending. How should the housing counselor respond? -ANSWER- I am unable to determine whether the loan is predatory but i suggest you shop around with other ledning sources Which action should a counselor recommend a client take first after discovering identity theft? -ANSWER- File an identity theft report 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- Front End Ratio Formula Conventional = <28% Which type of government insured loan was created for financing homes in rural areas? -ANSWER- USDA A client keeps having budget problems due to unexpected expenses. Which financial tool would best assist this client to prepare for unexpected expenses and avoid increasing credit usage? -ANSWER- Emergency Fund 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? -