CMC Client Relations and Advisory 2

Question 1

A client with a 580 credit score wants to purchase a home with 3% down. Which loan program is most appropriate to recommend?

Accepted Answer

FHA loan

Answer

FHA loans accept credit scores as low as 580 with a 3.5% down payment, making them the best fit for this client's profile.

Question 2

During a needs assessment, a client mentions they plan to sell their home in 3–4 years. Which mortgage structure best serves this client?

Accepted Answer

5/1 ARM

Answer

A 5/1 ARM offers a lower initial rate for five years, aligning with the client's short holding period and saving interest costs.

Question 3

A self-employed borrower cannot document income through W-2s. What alternative documentation strategy should a CMC explore first?

Accepted Answer

Bank statement loan program

Answer

Bank statement loan programs allow self-employed borrowers to qualify using 12–24 months of personal or business bank deposits as income evidence.

Question 4

A client asks why their Loan Estimate shows a higher APR than the stated interest rate. The CMC should explain that:

Accepted Answer

APR includes fees and costs spread over the loan term, making it higher

Answer

APR incorporates the interest rate plus financed fees and costs, giving borrowers a more complete view of the loan's true annual cost.

Question 5

Which technique helps a CMC uncover unstated client concerns during an advisory meeting?

Accepted Answer

Asking open-ended discovery questions

Answer

Open-ended questions encourage clients to share priorities, fears, and goals that may not emerge from yes/no inquiries.

(CMC) Certified Mortgage Consultant Practice Test