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

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

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

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

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

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

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

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.

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

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.

(CMC) Certified Mortgage Consultant Practice Test

(CMC) Certified Mortgage Consultant Practice Test

CMC Client Financial Advising 2