Practice Test Geeks(CMC) Certified Mortgage Consultant Practice Test
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Client Financial Advising Flashcards

7 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Client Financial Advising flashcards as text

  1. A client has a debt-to-income (DTI) ratio of 48%. Which action should a CMC recommend first?

    Answer: Advise the client to pay down revolving debt before applying

    A DTI of 48% is above the conventional 43–45% limit, so reducing revolving debt is the most direct way to improve eligibility.

  2. When advising a self-employed client on income documentation, which two years of tax returns are typically required by lenders?

    Answer: The most recent two consecutive years

    Lenders typically require the two most recent consecutive years of federal tax returns to establish consistent self-employment income.

  3. A client asks whether they should use gift funds for their down payment. What key condition must a CMC verify?

    Answer: The gift must be documented and not require repayment

    Lenders require a gift letter confirming the funds are a true gift with no expectation of repayment; the source must also be documented.

  4. A first-time homebuyer has excellent credit but minimal savings. Which program is BEST suited for a low down payment?

    Answer: FHA loan with 3.5% down

    FHA loans allow down payments as low as 3.5% for borrowers with a credit score of 580 or higher, making them ideal for asset-limited first-time buyers.

  5. A client wants to maximize the mortgage interest deduction. What filing status consideration should a CMC highlight?

    Answer: The standard deduction may exceed itemized deductions, reducing the tax benefit

    Since the 2017 Tax Cuts and Jobs Act raised the standard deduction significantly, many clients benefit more from the standard deduction than itemizing mortgage interest.

  6. Which credit score range typically qualifies a borrower for the best conventional mortgage rates?

    Answer: 740 and above

    Borrowers with credit scores of 740 or higher generally receive the most favorable conventional mortgage interest rates and pricing tiers.

  7. A client is comparing a 15-year vs. 30-year mortgage. What is the PRIMARY financial trade-off a CMC should explain?

    Answer: The 15-year loan has a lower interest rate but higher monthly payment

    A 15-year mortgage typically carries a lower interest rate but significantly higher monthly payments due to the compressed repayment schedule.