CMC Client Relations and Financial Advisory 2

Question 1

A client with a 620 credit score asks about their loan options. What is the most appropriate first step for the mortgage consultant?

Accepted Answer

Review the client's full credit report to identify specific derogatory items

Answer

Reviewing the full credit report allows the consultant to identify the root causes and provide tailored advice on loan options and credit improvement.

Question 2

Which disclosure must a mortgage consultant provide to a client within three business days of receiving a loan application under RESPA?

Accepted Answer

Loan Estimate

Answer

TRID requires lenders to deliver a Loan Estimate within three business days of receiving a completed loan application.

Question 3

A client is choosing between a 15-year and 30-year fixed-rate mortgage. Which factor most directly affects the total interest paid over the life of the loan?

Accepted Answer

Loan term length

Answer

A shorter loan term means fewer payment periods, dramatically reducing total interest paid even though monthly payments are higher.

Question 4

When a client expresses concern about rising interest rates, which product should a consultant typically discuss to provide payment certainty?

Accepted Answer

Fixed-rate mortgage

Answer

A fixed-rate mortgage locks in the interest rate for the life of the loan, eliminating the risk of payment increases due to rate changes.

Question 5

A client's debt-to-income ratio is 47%. Most conventional loan programs require a maximum DTI of what percentage?

Accepted Answer

45%

Answer

Fannie Mae and Freddie Mac generally allow a maximum DTI of 45% for conventional loans, though DU/LP may approve up to 50% in some scenarios.

(CMC) Certified Mortgage Consultant Practice Test

(CMC) Certified Mortgage Consultant Practice Test

CMC Client Relations and Financial Advisory 2