NMLS Mortgage Finance and Calculations 2

Question 1

A borrower has a gross monthly income of $6,000 and a proposed PITI payment of $1,500. What is the front-end DTI ratio?

Accepted Answer

25%

Answer

20%

Answer

28%

Answer

33%

Question 2

Which loan component is included in PITI but NOT in the principal and interest payment?

Accepted Answer

Hazard insurance escrow

Answer

Origination fee

Answer

Discount points

Answer

Prepaid interest

Question 3

A $200,000 mortgage at 6% annual interest has a first-month interest charge of how much?

Accepted Answer

$1,000

Answer

$1,200

Answer

$833

Answer

$600

Question 4

What does a loan's Annual Percentage Rate (APR) represent compared to the note rate?

Accepted Answer

The cost of credit expressed as a yearly rate including fees

Answer

The rate after the first adjustment period

Answer

The rate charged on the unpaid balance only

Answer

The rate used to calculate the monthly payment

Question 5

On a $300,000 loan with 2 discount points, how much does the borrower pay upfront for the points?

Accepted Answer

$6,000

Answer

$3,000

Answer

$2,000

Answer

$600

Question 6

A borrower's loan has a LTV of 85%. If the appraised value is $400,000, what is the loan amount?

Accepted Answer

$340,000

Answer

$360,000

Answer

$380,000

Answer

$320,000

Question 7

Which amortization type results in the borrower owing more than the original loan balance after making scheduled payments?

Accepted Answer

Negative amortization

Answer

Fully amortizing

Answer

Interest-only

Answer

Balloon