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Freddie Mac - Credit Smart Exam Questions And Answers
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Freddie Mac - Credit Smart Exam Questions And Answers 2024-2025The percent of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is derived from the total housing
payment, including: - Answer Principal, interest, property taxes, homeowner's insurance,
mortgage insurance, homeowner's or condo association fees
Lenders don't count your future housing payment in your debt-to-income ratio, just all
other outstanding debts. - Answer False
- The amount borrowed is the total amount. - True
Lenders calculate the mortgage affordability for self-employed borrowers based on one
of the following: gross income or net profits. - Net profits
An escrow account means an account specially maintained by the borrower for property
taxes and property insurance payments. - False
Having adequate cash reserves deomonstrates to your lender that you have ben prudent
with your cash and have reserves or other liquid assets you can tap in an emergency
situation. - True
Capital - or cash to close - is the amount you'll need to accumulate to cover the cost of
down payment plus closing costs. -True
Acceptable sources of capital include: - Answer Funds from a family member, funds from
a down payment assistance program or funds from your savings account
Lenders consider investments to be (select all that apply): - Answer IRAs, bonds, CDs,
stocks and 401(k) plans.
, To determine whether you have enough savings to secure a mortgage and can afford
homeownership, lenders will use the average of your last six months' checking and
savings account balance. -Answer False
Lenders examine four key factors when determining to approve a loan - the 4 C's of
lending. What are they? -Answer Credit, Capacity, Capital and Collateral
Derogatory information included on your credit report may include: collections,
judgements, bankruptcies and/or late payments. - Answer True
Lenders generally have no guidelines or restrictions regarding the home you want to
purchase or its condition as long as you have good credit. - Answer False
The home inspection is ordered through the lender and dictates the market value of the
home. - Answer False
Manufactured homes are the same as mobile homes and aren't required to meet federal
construction and safety standards. - Answer False
Making extra payments on your loan allows for paying down principal faster, and great
reduction of interest due on the loan. - Answer True
Government-insured loans, which includes FHA loans, are one of the only low down
payment mortgages available to homebuyers. - Answer False
A fixed-rate mortgage is a loan where the interest rate does not change during the life of
the loan. - True
Which of the following loans are insured by the federal government? (select all that
apply) - VA, USDA, FHA
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