Mortgage Mortgage Underwriting and Qualification Questions and Answers 2

Question 1

What is the maximum debt-to-income (DTI) ratio typically allowed for a qualified mortgage under the ATR/QM rule?

Accepted Answer

43%

Answer

50%

Answer

36%

Answer

28%

Question 2

Which of the following would an underwriter consider a compensating factor when a borrower has a slightly high DTI ratio?

Accepted Answer

Significant cash reserves after closing

Answer

A recent job change to a new industry

Answer

Multiple recent credit inquiries

Answer

A short employment history

Question 3

In mortgage underwriting, what does CAIVRS stand for and what is its purpose?

Accepted Answer

Credit Alert Interactive Voice Response System — checks for federal debt defaults

Answer

Consumer Automated Income Verification Review System — verifies income

Answer

Centralized Appraisal Information Verification and Reporting System — validates appraisals

Answer

Credit Analysis and Individual Verification Reporting System — scores creditworthiness

Question 4

When underwriting a self-employed borrower, how many years of tax returns are typically required?

Accepted Answer

2 years

Answer

1 year

Answer

3 years

Answer

5 years

Question 5

What is the purpose of a Verification of Employment (VOE) in the underwriting process?

Accepted Answer

To confirm the borrower's current employment status, position, and income

Answer

To verify the borrower's educational background

Answer

To check the borrower's criminal history

Answer

To validate the borrower's citizenship status

Question 6

Which type of income is typically NOT considered stable or qualifying income by mortgage underwriters?

Accepted Answer

One-time insurance settlement proceeds

Answer

Base salary from W-2 employment

Answer

Consistent overtime documented for two years

Answer

Social Security retirement benefits