MLO Practice Exam Questions & Answers

MLO Practice Exam Questions & Answers All of the following information is provided under Section X of the 1003, except: a.) Ethnicity b.) Name and address of employer c.) Sex d.) Race - ANS - b.) Name and address of ...

MLO Practice Exam Questions & Answers All of the following information is provided under Section X of the 1003, except: a.) Ethnicity b.) Name and address of employer c.) Sex d.) Race - ANS - b.) Name and address of employer Section X of the URLA contains information on: a.) Assets and Liabilities b.) Information for Government Monitoring Purpose c.) Declarations d.) Details of transaction - ANS - b.) Information for Government Monitoring Purpose When determining the best options for a potential borrower, an MLO must always find what? a.) Nonconventional b.) Federal Housing Administration c.) Nonconforming d.) Department of The Veterans Administration - ANS - c.) Nonconforming Choose the best answer. All of the following are Government loan programs or types, except: a.) Nonconventional b.) Federal Housing Administration c.) Nonconforming d.) Department of the Veterans Administration - ANS - c.) Nonconforming What is the purpose of Title IX? - ANS - To ensure the borrower acknowledges that the information provided in the application is accurate and correct If you are an MLO speaking to a potential client in person and at section X of the URLA they refuse to provide the information for monitoring purposes, what must you do? - ANS - Mark only the ones you can confirm through visual observation What type of income documentation must the processor collect for a self-employed borrower? a.) 2 years W2s b.) 2 years paystubs c.) 2 years 1099s d.) 2 years tax returns - ANS - d.) 2 years tax returns What type of income documentation must the processor collect for a salaried or hourly employee of a company? a.) 2 year w2's b.) most recent 30 days worth of pay stubs c.) 2 years 1099s d.) social security award letter - ANS - c.) 2 years 1099s What type of income documentation must the processor collect for a borrower who works as an independent contractor? a.) 30 days worth of paystubs b.) 2 years W2s c.) 2 years 1099s d.) Social security award letter - ANS - The 4506-T is a document used to: - ANS - obtain a tax transcript summary JoAnn is refinancing her home. The estimated value of her home is $400,000, and her new loan amount is $325,525. JoAnn makes $33.50 an hour, and works 40 hours a week. Her new PITI payment is $1,650. She also has a car payment of $430 a month, a Visa payment of $88 a month, and a student loan payment of $345 a month. She also takes guitar lessons, which cost $270 a month. What is JoAnn's Gross Monthly Income? a. $1,340.00 b. $2,680.00 c. $5,806.67 d. $6,527.33 - ANS - c. $5,806.67 Paul is refinancing his home. The estimated value of his home is $725,000, and his new loan amount is $525,700. Paul makes $5,000 a week salary. His new PITI payment is $2,700. He also has a car payment of $540 a month, a Visa payment of $200 a month, a MasterCard payment of $103 a month. What is Paul's Gross Monthly Income? a. $10,833.33 b. $18,500.00 c. $21,666.67 d. $24,272.33 - ANS - c. $21,666.67 Sarah is purchasing a home. The purchase price is $227,500 and she is putting 10% down. What is the loan amount? a. $204,750.00 b. $22,750.00 c. $227,500.00 d. $207,450.00 - ANS - a. $204,750.00 The property Tiffany is purchasing was appraised at $206,000. The purchase price was $205,400 and the new loan amount is $164,32. What is the LTV? - ANS - 80% Jordan has a new PITI payment of $1,225, a Visa payment of $155 a month, a Home Depot charge card payment of $357 a month and a car payment of $225 a month. He makes $3,200 bi-weekly. He also has a pet poodle which he gets groomed once a week, which costs $27 for each session. What is Jordan's Gross Monthly Income? - ANS - $6,933.33 George works as a machine operator and makes $3,212 Semi-monthly. What is his GMI? - ANS - $6,424.00 Which of the following is not one of The Big Three Credit Bureaus? a. Experian b. Equifax c. Transunion d. Credstar - ANS - d. Credstar Which of the following would be disclosed in the Public Record Items section of the consumer's credit report? a. Previous Bankruptcy b. A 30 day late car payment c. A 60 day late credit card payment d. A past due utility bill - ANS - a. Previous Bankruptcy What are the qualifying debt ratios for a Fannie Mae or Freddie Mac loan? - ANS - 28%/36% If a buyer puts down less than 10% on a conventional loan, what is the maximum percentage they can receive in seller concessions - ANS - 3% What is the required minimum down payment on a Fannie Mae loan? - ANS - 5% A conforming loan requires private mortgage insurance when the borrower makes a down payment of less than: a. 10% b. 15 % c. 20% d. 5% - ANS - c. 20% Conforming conventional loans can be used on all of the following except: a. Primary b. Vacation c. Rental d. Commercial - ANS - d. Commercial All of the following are advantages of the FHA mortgage loan except: a. Min down payment of 3.5% b. Loan is assumable c. No underwriting or qualification guidelines d. No pre-payment penalties - ANS - c. No underwriting or qualification guidelines The one-time fee required by FHA is? - ANS - The Upfront Mortgage Insurance Premium and is a fee of 1.75% What are the qualifying debt ratios for a VA loan? - ANS - o%/ 41% If a buyer puts down less than 10% on a VA loan, what is the maximum percentage they can receive in seller concessions? - ANS - 4% The funding fee on a VA loan ranges from: a. 0.5-3.3% b. 0.5-3.0% c. 1.20-1.25% d. .35-.60% - ANS - a. 0.5-3.3% What is the required minimum down payment on a VA loan? - ANS - No Down Payment Required What are the qualifying debt ratios for a USDA loan? a. 0%/41% b. 28/36% c. 29/41% d. 29/45% - ANS - d. 29%/45% - ANS -