Mortgage Loan Originator Mortgage Math and Calculations 3

Question 1

A borrower has gross monthly income of $7,000, a monthly mortgage payment of $1,600, and other monthly debt payments of $400. What is the back-end DTI?

Accepted Answer

28.6%

Answer

22.9%

Answer

34.3%

Answer

37.1%

Question 2

A $180,000 loan has an APR of 6.5% and a note rate of 6.0%. Why is the APR higher than the note rate?

Accepted Answer

The APR includes fees and costs spread over the loan term

Answer

The APR includes only the interest charges

Answer

The APR reflects the lender's profit margin

Answer

The APR uses a different compounding period

Question 3

A borrower pays $3,600 in discount points to lower their rate. Their monthly savings from the rate reduction is $75. How many months until the borrower breaks even?

Accepted Answer

48 months

Answer

24 months

Answer

36 months

Answer

60 months

Question 4

A self-employed borrower shows net Schedule C income of $60,000 in Year 1 and $72,000 in Year 2. What is the qualifying monthly income?

Accepted Answer

$5,500

Answer

$5,000

Answer

$6,000

Answer

$7,000

Question 5

A borrower makes a $15,000 down payment on a $150,000 home. PMI is required when LTV exceeds 80%. Will this borrower need PMI?

Accepted Answer

Yes, because the LTV is 90%

Answer

No, because the LTV is exactly 80%

Answer

No, because the LTV is 85%

Answer

Yes, because the LTV is 85%

Question 6

A buyer's FHA loan amount is $240,000 with an annual MIP rate of 0.85%. What is the monthly MIP payment?

Accepted Answer

$170

Answer

$150

Answer

$190

Answer

$204

Question 7

A borrower earns $4,500/month from employment and $800/month in rental income. The lender uses 75% of rental income. What is the qualifying monthly income?

Accepted Answer

$5,100

Answer

$4,500

Answer

$5,300

Answer

$5,900