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Mortgage and Loan Qualification Quiz Question 1: What does a credit report primarily help lenders evaluate? A) The borrower's favorite color B) The borrower's payment practices and credit management C) The borrower's social media activity Answer: B) The borrower's payment practices and credit manage...

Mortgage and Loan Qualification Quiz Question 1: What does a credit report primarily help lenders evaluate? A) The borrower's favorite color B) The borrower's payment practices and credit management C) The borrower's social media activity Answer: B) The borrower's payment practices and credit management Question 2: What is the term for the ratio that compares total monthly housing expenses to gross monthly income? A) Total Debt Ratio B) Housing Ratio C) Capacity Ratio Answer: B) Housing Ratio Question 3: Which of the following is NOT one of the five C's of credit? A) Capacity B) Collateral C) Color Answer: C) Color Question 4: What is the maximum back-end ratio generally preferred by FNMA for 1st Mortgages? A) 28% B) 36% C) 45% Answer: B) 36% Question 5: What does LTV stand for? A) Long-Term Value B) Loan-To-Value C) Legal Tender Value Answer: B) Loan-To-Value Question 6: Which type of loan does not require mortgage insurance because it is guaranteed? A) FHA Loans B) Conventional Loans C) VA Loans Answer: C) VA Loans Question 7: What is considered a good practice for determining a borrower's ability to repay a loan? A) Guessing based on their appearance B) Checking their Gross Monthly Income and monthly obligations C) Asking their friends if they are trustworthy Answer: B) Checking their Gross Monthly Income and monthly obligations Question 8: What does CLTV stand for? A) Combined Loan-To-Value Ratio B) Current Loan-To-Value Ratio C) Credit Loan-To-Value Ratio Answer: A) Combined Loan-To-Value Ratio Question 9: Which loans do NOT follow FNMA or FHLMC guidelines? A) Conforming loans B) Non-conforming loans C) FHA Loans Answer: B) Non-conforming loans Question 10: What is a critical document that lenders review to understand a borrower's credit management? A) A tri-merge credit report B) A high school report card C) A Netflix viewing history Answer: A) A tri-merge credit report Question 11: What does FHA stand for? A) Federal Housing Association B) Federal Housing Administration C) Financial Help Association Answer: B) Federal Housing Administration Question 12: What is the term for the ratio that compares a borrower's total monthly debts to their gross monthly income? A) Front-End Ratio B) Back-End Ratio C) Side-End Ratio Answer: B) Back-End Ratio Question 13: Which of the following is a factor in assessing a borrower's creditworthiness? A) Their favorite movie B) The amount of cash and liquid assets in their accounts C) Their choice of car Answer: B) The amount of cash and liquid assets in their accounts Question 14: What does PMI stand for? A) Public Mortgage Insurance B) Private Mortgage Insurance C) Personal Money Investment Answer: B) Private Mortgage Insurance Question 15: What does the term "non-traditional credit sources" refer to? A) Credit from sources like rent and utility payments B) Credit from winning a lottery C) Credit from a secret society Answer: A) Credit from sources like rent and utility payments