Mortgage Underwriting and Financial Calculations 2

Question 1

A borrower earns $6,500/month gross income and has a proposed PITI of $1,750 plus monthly debts of $400. What is their back-end DTI ratio?

Accepted Answer

32.3%

Answer

26.9%

Answer

33.1%

Answer

33.8%

Question 2

Which factor does NOT directly affect a borrower's Loan-to-Value (LTV) ratio?

Accepted Answer

Borrower's credit score

Answer

Purchase price of the property

Answer

Down payment amount

Answer

Appraised value of the property

Question 3

What does a Combined Loan-to-Value (CLTV) ratio measure?

Accepted Answer

The ratio of all liens on a property to its appraised value

Answer

The ratio of only the first mortgage to the appraised value

Answer

The ratio of the down payment to the purchase price

Answer

The ratio of monthly debt payments to gross income

Question 4

A property appraises for $320,000 and the borrower puts 10% down. What is the LTV?

Accepted Answer

90%

Answer

80%

Answer

85%

Answer

95%

Question 5

What is the maximum allowable DTI for a Qualified Mortgage (QM) under the general definition?

Accepted Answer

43%

Answer

36%

Answer

41%

Answer

50%

Question 6

When calculating qualifying income for a self-employed borrower, underwriters typically average how many years of tax returns?

Accepted Answer

Two years

Answer

One year

Answer

Three years

Answer

Five years

Question 7

A loan with a 75% LTV on a conventional purchase would most likely:

Accepted Answer

Not require PMI

Answer

Require FHA mortgage insurance

Answer

Require private mortgage insurance (PMI)

Answer

Require a VA funding fee