Assessment Flashcards
7 cards from real Mortgage Loan Originator practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Assessment flashcards as text
A borrower's gross monthly income is $6,000 and total monthly debt payments are $2,100. What is their debt-to-income (DTI) ratio?
Answer: 35%
DTI = total monthly debt / gross monthly income = $2,100 / $6,000 = 35%.
Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of receiving a loan application?
Answer: TILA-RESPA Integrated Disclosure (TRID)
TRID, which integrates TILA and RESPA disclosures, requires the Loan Estimate be delivered within three business days of application.
A property appraises for $280,000 and the borrower wants to borrow $238,000. What is the loan-to-value (LTV) ratio?
Answer: 85%
LTV = loan amount / appraised value = $238,000 / $280,000 = 85%.
Under the SAFE Act, which entity maintains the Nationwide Multistate Licensing System (NMLS) registry?
Answer: Conference of State Bank Supervisors (CSBS)
The NMLS is operated by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.
Which type of mortgage index is based on U.S. Treasury securities and commonly used for adjustable-rate mortgages?
Answer: Constant Maturity Treasury (CMT)
The Constant Maturity Treasury (CMT) index is widely used as a benchmark for ARM loans and is based on U.S. Treasury yields.
What is the maximum seller concession allowed on a conventional loan with an LTV greater than 90%?
Answer: 3%
Fannie Mae limits seller concessions to 3% of the sales price when LTV exceeds 90% on conventional loans.
A borrower receives a mortgage with a rate of 6.5% and the APR disclosed is 6.78%. What accounts for the difference?
Answer: The APR includes fees and costs of credit spread over the loan term
APR includes the interest rate plus financing costs such as origination fees and points, expressed as a yearly rate.