CMA Credit Analysis and Borrower Qualification

Question 1

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

Accepted Answer

580

Answer

FHA guidelines require a minimum 580 FICO score for the 3.5% down payment option; scores between 500–579 require 10% down.

Question 2

Which of the following best describes the 'front-end' debt-to-income (DTI) ratio?

Accepted Answer

Monthly housing expense divided by gross monthly income

Answer

The front-end (housing) DTI ratio compares only the proposed monthly housing payment (PITI) to the borrower's gross monthly income.

Question 3

What are the five factors used to calculate a FICO credit score, listed in order from most to least impactful?

Accepted Answer

Payment history, amounts owed, length of credit history, new credit, credit mix

Answer

FICO scores are calculated using payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%), and credit mix (10%).

Question 4

What is a 'rapid rescore' in the mortgage qualification process?

Accepted Answer

A fee-based service that expedites credit report updates to reflect recent paydowns or corrections within days

Answer

A rapid rescore allows mortgage lenders to submit documentation of account updates to credit bureaus for expedited rescore, often within 3–5 business days.

Question 5

Under conventional lending guidelines, what is the maximum back-end DTI ratio typically allowed without compensating factors?

Accepted Answer

43%

Answer

Fannie Mae and Freddie Mac conventionally allow up to 43% back-end DTI without compensating factors, though DU/LP may approve higher ratios with strong compensating factors.

(CMA) Certified Mortgage Advisor Practice Test

(CMA) Certified Mortgage Advisor Practice Test

CMA Credit Analysis and Borrower Qualification