Practice Test Geeks(CRB) Certified Retail Banker Practice Test
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Lending & Credit Products Flashcards

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

Read the first 7 Lending & Credit Products flashcards as text

  1. What is the Debt-to-Income (DTI) ratio primarily used to evaluate in consumer lending?

    Answer: The proportion of a borrower's monthly gross income consumed by monthly debt obligations

    DTI divides total monthly debt payments by gross monthly income, giving lenders a snapshot of whether the borrower can afford additional debt service.

  2. Under the Qualified Mortgage (QM) rule, what is the maximum back-end DTI ratio generally permitted?

    Answer: 43%

    The CFPB's Qualified Mortgage rule generally caps the back-end DTI at 43%, ensuring the borrower has a reasonable ability to repay the mortgage.

  3. What is the purpose of Private Mortgage Insurance (PMI) on a conventional loan?

    Answer: It protects the lender if the borrower defaults when LTV exceeds 80%

    PMI protects the lender — not the borrower — against loss if the borrower defaults on a conventional mortgage with an LTV greater than 80%.

  4. On a 5/1 Adjustable-Rate Mortgage (ARM), what do the numbers 5 and 1 represent?

    Answer: The rate is fixed for 5 years, then adjusts every 1 year thereafter

    On a 5/1 ARM, the interest rate is fixed for the first 5 years and then resets annually based on a specified index plus a margin.

  5. A jumbo mortgage differs from a conforming mortgage primarily because it:

    Answer: Exceeds the loan limits set by Fannie Mae and Freddie Mac

    A jumbo loan exceeds the conforming loan limits established by the FHFA for Fannie Mae and Freddie Mac, making it ineligible for purchase by those GSEs.

  6. What is a balloon payment mortgage?

    Answer: A mortgage with a large lump-sum payment due at the end of a short term

    A balloon mortgage features smaller regular payments based on a long amortization schedule but requires the entire remaining balance to be paid in full at the end of a shorter term.

  7. When underwriting a consumer loan, a retail banker reviews the 'Five Cs of Credit.' Which of the following is NOT one of the Five Cs?

    Answer: Currency

    The Five Cs of Credit are Character, Capacity, Capital, Collateral, and Conditions — 'Currency' is not among them.

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Sources & references

Exam facts on this page (fees, format, dates, passing scores) are checked against these official sources; the date is our last check. Editorial policy

  1. ebi.gov.eg — Exam dates, fees, registration deadline, test delivery, eligibility, passing score · verified Oct 2026
  2. retailbankinginstitute.com — Test delivery, eligibility, fees, score release, exam format, registration, exam information · verified Oct 2026