4. Income Quiz

Play an AI-generated podcast conversation about this lesson

If a borrower's monthly PITI is 1500 and their monthly gross income is 6000, what is their front-end ratio?

35%

20%

30%

25% (correct)

Which of the following is NOT a factor considered in calculating the front-end ratio?

Principal

Interest

Taxes

Credit card payments (correct)

What is the purpose of the back-end ratio?

To evaluate the loan-to-value ratio

To assess the borrower's creditworthiness

To calculate the total monthly debt obligations (correct)

To determine the portion of monthly income used for housing expenses

How is commission income calculated for a borrower?

Based on the average of the previous 2 years' income Signup and view all the answers

When using retirement or social security income for qualification, what documentation is required?

Verification from the source of the income Signup and view all the answers

If a borrower's monthly gross income is 4,000 and their total monthly obligations are 1,400, what is their back-end ratio?

35% Signup and view all the answers

If a property has a value of 800,000 and the loan amount is 500,000, what is the LTV ratio?

62.5% Signup and view all the answers

What is the primary income documentation method used in a bank statement loan program?

Deposits shown on 12-24 months of bank statements Signup and view all the answers

If Mark is paid 1,158 weekly, what is his monthly income?

1,158 x 52 weeks ÷ 12 months = 5,018 Signup and view all the answers

If Luke is paid 2,500 bimonthly, what is his monthly income?

2,500 x 24 payments per year ÷ 12 months = 5,000 Signup and view all the answers

What document is used to establish the continuance of the borrower's employment?

Verification of Employment (V.O.E.) form Signup and view all the answers

What type of income documentation is required to establish a two-year history of salary or W-2 income?

The most recent 30-days pay stubs and the year-end W-2 for the prior two years Signup and view all the answers

How should negative rental income be treated?

As a recurring liability Signup and view all the answers

What percentage of ownership interest in a business qualifies a borrower as self-employed?

25% Signup and view all the answers

If a property has a value of 500,000 and the first mortgage is 400,000 with an additional home equity loan of 50,000, what is the CLTV ratio?

90% Signup and view all the answers

4. Income Quiz

Podcast Beta

Questions and Answers