CMC Client Financial Advising 2

Question 1

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

Accepted Answer

Advise the client to pay down revolving debt before applying

Answer

Approve the loan immediately since 48% is below 50%

Answer

Suggest the client apply for a jumbo loan instead

Answer

Recommend the client co-sign with a family member

Question 2

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

Accepted Answer

The most recent two consecutive years

Answer

The most recent one year only

Answer

Any two years within the past five

Answer

Three years to account for income volatility

Question 3

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

Accepted Answer

The gift must be documented and not require repayment

Answer

The gift must come from a blood relative only

Answer

The gift giver must be a U.S. citizen

Answer

The gift amount cannot exceed $10,000

Question 4

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

Accepted Answer

FHA loan with 3.5% down

Answer

Conventional 30-year fixed with 20% down

Answer

Jumbo loan with 10% down

Answer

USDA commercial loan

Question 5

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

Accepted Answer

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

Answer

Only married couples filing jointly can deduct mortgage interest

Answer

The deduction is only available on primary residences, not second homes

Answer

Mortgage interest is fully deductible regardless of loan amount

Question 6

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

Accepted Answer

740 and above

Answer

620–639

Answer

640–679

Answer

680–719

Question 7

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

Accepted Answer

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

Answer

The 30-year loan always has a lower total interest cost

Answer

The 15-year loan requires private mortgage insurance

Answer

The 30-year loan cannot be paid off early without penalties