Mortgage Underwriting and Qualification 3

Question 1

Which credit score model is most commonly used by mortgage lenders in the U.S.?

Accepted Answer

FICO Mortgage Score (Versions 2, 4, 5)

Answer

VantageScore 3.0

Answer

FICO Score 8

Answer

Experian PLUS Score

Question 2

What is the minimum credit score generally required for an FHA loan with a 3.5% down payment?

Accepted Answer

580

Answer

500

Answer

620

Answer

640

Question 3

In underwriting, what does 'seasoning' of funds refer to?

Accepted Answer

How long funds have been in the borrower's account

Answer

The age of the mortgage loan

Answer

The interest rate adjustment period

Answer

The time since last late payment

Question 4

Which of the following is NOT counted in a borrower's monthly debt obligations for DTI calculation?

Accepted Answer

Car insurance premiums

Answer

Student loan payments

Answer

Minimum credit card payments

Answer

Auto loan payments

Question 5

What triggers an automated underwriting system (AUS) to require manual underwriting?

Accepted Answer

A 'Refer' or 'Caution' finding from the AUS

Answer

A borrower with a perfect credit score

Answer

A conventional loan application

Answer

A salaried W-2 borrower

Question 6

A borrower earns $6,000/month and pays $1,800/month toward all debts including the proposed mortgage. What is their back-end DTI?

Accepted Answer

30%

Answer

25%

Answer

35%

Answer

40%

Question 7

What is the purpose of the 4506-C form in the mortgage underwriting process?

Accepted Answer

To authorize the IRS to release tax transcripts to the lender

Answer

To order a property appraisal

Answer

To verify the borrower's employment

Answer

To request a credit report