Xinnix Ground School Questions with correct Answers

Xinnix Ground School Questions with correct Answers Flipping is a scheme where several people each purchase a property within the neighborhood and then sell the properties to one another, inflating the price of the home with each sale. False YTD paystubs will be requires from a borrower that is self-employed (schedule C) False A borrower requesting a jumbo loan will qualify for an agency loan False Trailing spouse income can be used for qualifying purposes. False The following are types of renovation mortgages FNMA Homestyle and FHA 203(K) The maximum LTV for a 1-unit investment property is 95% False A simultaneous second mortgage is obtained at the same time as a first mortgage. True The builder must provide an appraisal certificate to the mortgage company on a FHA new construction loan prior to closing. False HOA dues are included in the PITI calculation False A room addition is allowed under the FHA 203(K) limited programs. False Loans with an LTV higher than 80% generally require mortgage insurance. True Tenancy in Common is not an acceptable manner in which title may be held. False FHA guidelines require 3 years to have passed since a foreclosure, deed in lieu, or short sale before a borrower may apply for an FHA loan True If a borrower qualifies for an agency loan of $295,750, FHA is a viable loan option. True A borrower's brother would like to give her money to help towards the down payment of her new house. This would be considered______ A gift from a relative and would require a gift letter, as well as proof that the funds have been transferred to the borrower's account. Depreciation should be added to a borrower's income who owns several investment properties. True Unless a borrower can document extenuating circumstances, they must wait at least 7 years from a Chapter 7 bankruptcy or foreclosure to apply for conventional financing False A HUD Consultant would not be required for an FHA 203(k) standard program False A partner's percentage of ownership and earnings can be located on Schedule E part 2 of their personal tax returns False VA sets their own maximum loan limits. False The maximum allowable ratios for an owner-occupant when using a non-occupant co-borrower per FHLMC guidlines is ________. 35/43 Reimbursed business expenses are ________________ ___________ the borrowers gross income. Added to Unreimbursed business expenses ___________ the borrower's income are subtracted from If your borrower is being relocated and needs to close in 30-days, and their spouse will not be moving for 3 months, the spouse's income can still be used to qualify. False Income or losses derived from partnerships can be located on Schedule K-1 of a borrower's personal tax return. False If a borrower tell you about a liability that is not listed on the credit report, it doesn't need to be included on the loan application False A liability not listed on the credit report will typically need to be included on the loan application. True The borrower does not want their P&I payments to go above $1,250 per month on a 30-year term. With an interest rate of 6.5 what is the maximum loan amount for this borrower? (Round to the nearest 50) $197,750 (Hint: type in what you know) Based on the following scenario, what is the borrower's qualifying ratios under FHLMC guidelines? PITI: $3,350 Income: $8,350 Debt: $595 car payment 40.12/47.25 (Hint: PITI/Income and PITI + Debt/Income) Using the information provided, answer the following FHA question: Sales Price = 137,300 Interest rate = 6.875% 30 Year fixed Taxes = 1.5% Homeowners Insurance =.3% What is the PITI? (Awaiting answer) Which type of letter would be best for a borrower who has made an offer on a property and has provided their pay stubs, bank statements and W2s? Commitment letter What is the qualifying rate for a 3/1 Arm with a note rate of 4.25% and 2/6 caps? The fully-indexed rate is 6.36%. 6.38% (start rate + 2% or Fully indexed rate, whichever is greatest if Arm is 5 years or less, if greater than 5 years then its start rate) What is the largest house payment Ms. Joyce can have with her current income of $92,650 per year considering she has a $525 car payment and $0 in credit cards? (FHLMC) $2,161.83 The following repairs are allowed under the FHA 203(k) Standard program. (Minimum $5,000 in repairs) Roof replacement, installing or repairing fencing, interior and exterior painting Using the information provided, answer the following cash-out question using FNMA: (do NOT round the loan down) Value = $350,000 Current Balance = $228,000 Current payment = $1,920 Cash requested = $20,000 Taxes = $270 monthly Homeowners insurance = $75 monthly Closing Cost = 2.5% Prepaids = 1% What is their new loan amount and proposed monthly payment (PITI) based on a 30 year fixed rate of 6.375%? (course 5 Lesson 6) What is the borrower reserve requirement, using manual underwriting, for an investment property? (FHLMC) 6 months PITI for subject property and 2 months for each additional property (except for primary residence) HOA dues should be added to the PITI for the purpose of calculating ratios when qualifying a borrower. True When considering a FHLMC loan, the maximum allowable ratios for the owner occupant when using a non-occupant co-borrower are 35/43. True A borrower who has made an offer on a property, but has not yet provided their paystubs, bank statements and W2s would be issued which letter? Pre-Qualification Letter (Hint: Not worth the paper its on) How long does a consumer have to shop for a mortgage without the credit inquiries affecting their score? 30 days What is the maximum seller contribution allowed for a primary residence at 85% LTV? (FNMA/FHLMC) 1. 9% of value for mortgages with LTV ratios of less than or equal to 75% 2. 6% of value for mortgages with LTV ratios greater than 75% up to and including 90% 3. 3% of value for mortgages with LTV ratios greater than 90% A borrower is considering a 1-year ARM with a note rate of 4.25% 2/6 caps and a margin of 2.5% What would the borrower's interest rate be for year 2 if the index is at 4.25%? 6.25% (higher of start rate +2% or fully indexed rate) A stand-alone is a second mortgage obtained separately from a first mortgage. True If a borrower qualifies for an agency loan of $215,000 FHLMC is a viable loan option. True A HELOC loan has an interest only payment True Residual Income is the amount of income available for family support after taxes and social security expense have been subtracted from the gross income and after PITI and other long-term debt has been paid. True What is the largest house payment that MR. Coulter can have with his current income of $75,500 per year considering he just bought a car with a payment of $525 per month? (FNMA) $1740 (Hint: 36% of monthly income - car payment or debts) There is no minimum credit score needed to run/submit both HomeOne and Home Possible through an automated underwriting system True Which of the following is the correct list of charges included when calculating the borrower's cash to close? Down Payment, Closing Cost, Prepaids, Discount Points, MI paid in Cash (UPMIP/FF) A borrower must qualify at the note rate on a temporary buydown, not the start rate. True A 2/1 buydown typically cost 2.5 discount points. Give or take .25% True Which is the correct coverage requirement, monthly MI factor and monthly MI payment based on the following scenario: $145,000 Sales price $20,000 down payment 5/1 ARM with 2/6 caps 30-year amortization Agency Loan Primary residence 25% / .62% / 64.58 A borrower is considering a 1-year ARM with a note rate of 4.25%, 2/6 caps and a margin of 2.5%. What would the borrower's interest rate be for year 2 if the index is at 4.25% 6.25 A borrower can use a credit card to pay for their required down payment. False The borrower must have 5% of their own funds when putting 15% down on a primary residence. (FNMA) False Relief Refinance Program loans are designed to help homeowners who are current on their mortgage payments but are unable to refinance due to a drop in their home value. True A HELOC second mortgage may or may not be fully disbursed at closing. Typically, it has a variable interest rate with an interest only payment. There is a designated draw period and repayment period. True If a student loan payment is deferred, it does not have to be included in the borrower's ratios (FNMA/FHLMC) False