Mortgage Mortgage Underwriting and Financial Calculations Questions and Answers 3

Question 1

A borrower earns $6,200 per month and wants to qualify for a loan with a maximum front-end ratio of 28%. What is the maximum allowable monthly housing payment?

Accepted Answer

$1,736

Answer

$1,860

Answer

$1,550

Answer

$2,170

Question 2

During the underwriting process, a tri-merge credit report is pulled. What does this report combine?

Accepted Answer

Data from Equifax, Experian, and TransUnion

Answer

Data from the borrower's three most recent employers

Answer

Three separate appraisal reports

Answer

Income data from three tax return years

Question 3

An underwriter is reviewing a self-employed borrower's tax returns and notices a net operating loss carryforward. How should this be treated?

Accepted Answer

It should be added back to the borrower's qualifying income since it is a non-cash deduction

Answer

It should reduce the borrower's qualifying income

Answer

It should disqualify the borrower entirely

Answer

It has no impact and is ignored in underwriting

Question 4

What is the purpose of the Loan Estimate (LE) that must be provided within three business days of a mortgage application?

Accepted Answer

To disclose estimated loan terms, projected payments, and closing costs to the borrower

Answer

To provide the final binding closing costs the borrower must pay

Answer

To serve as the borrower's formal acceptance of the loan offer

Answer

To replace the need for a Good Faith Estimate under RESPA

Question 5

When using the income approach to value a rental property for underwriting, which figure does the appraiser capitalize?

Accepted Answer

Net operating income

Answer

Gross rental income

Answer

Effective gross income

Answer

Total scheduled rent

Question 6

A borrower is applying for an FHA loan with a credit score of 620. What is the minimum down payment required?

Accepted Answer

3.5% of the purchase price

Answer

5% of the purchase price

Answer

10% of the purchase price

Answer

20% of the purchase price