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HUD Exam - Housing Affordability Exam Questions and Answers
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HUD Exam - Housing Affordability Exam Questions and Answers
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HUD Exam - Housing AffordabilityExam Questions and Answers
All of the following are true statements about upfront costs associated with
renting and buying, except;
A. Renters generally pay a security deposit upon signing a lease.
B. The average cost due upon signing a lease for a rental is typically
between 20% of the monthly rent..
C. Closing costs are typically comprised of lender fees, discount points, title
insurance, home inspection fees, escrow deposit, property taxes, private
mortgage insurance, and attorney's fees.
D. A client who desires to purchase a home worth $150,000 could be
required to pay $7,000 in standard closing costs. - -B. The average costs due
upon signing a lease for a rental is typically 20% of the monthly rent.
-This statement is not true. However, the figure of 20% is relevant for those
considering buying a home (down payment).
-A couple, the Smiths, recently scheduled a meeting with Rebecca. They
have owned their home for seven years and have accumulated some equity
in the home. However, they are now struggling to pay their mortgage,
because the wife left her full-time job when she had a baby. Her husband's
salary is paid in installments of $900 a week, which are subject to deductions
and other withholdings. Each month, they pay $1,000 in principal and
interest, $110 for taxes, $130 for insurance, and $20 in homeowners
assessments. What is their current front-end ratio (as a whole number with
no decimal point)? - -32%
Formula: Gross monthly income = Total weekly pay before deuctions x 52 /
12
Front end ratio = Monthly housing expenses / Gross monthly Income.
-One option that Rebecca suggests to the Smiths is to sell their home and
rent a home that is smaller and more affordable. If the Smiths decide to do
this, they will no longer have a mortgage, so what is the maximum amount
that they can afford to pay in rent and renters insurance each month? Tip:
Recall that the husband 's salary is paid in installments of $900 a week,
which are subject to deductions and other withholdings. - -$1,170
-If the Smiths sell their home and purchase a more affordable property, what
is the maximum amount that is affordable for the Smiths to pay in PITIA each
month if they obtained a conventional loan? Tip: Recall that the husband 's
salary is paid in installments of $900 a week, which are subject to deductions
and other withholdings - -$1,092
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