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chapter 12 quiz questions only – answers will be revealed with Post-License subscriptions
1 of 10 – Your client’s monthly income is $3600. He has $600/month in debt-related bills (car payment, credit cards, etc.). The mortgage payment on the home he wants to buy would be $1,020/month, putting his total monthly debt at $1,620. Your client’s debt-to-income ratio?
Has no bearing on his ability to qualify for a loan, because he has excellent credit.
Would be at 40%, which is slightly above accepted levels for most lenders, but his good credit might allow him to qualify anyway.
Will not be a problem if he is willing to get a part-time job.
Would be at 45%, which is well above the 36% preferred by most lenders. He may have to consider homes in a lower price range.
2 of 10 – The Real Estate Settlement Procedures Act requires?
Real Estate agents to fully disclose their commission and other fees.
Lenders to fully disclose their fees and costs to borrowers.
That closing take place within 30 days of buyer and seller reaching an agreement.
Requires that real estate agents be present at their clients’ closings.
3 of 10 – Title insurance does NOT protect the lender if?
The ex-wife of the previous owner suddenly claims to have partial ownership of the property.
The borrower defaults on the mortgage.
A construction lien that was never recorded is discovered two years after the borrower closed on the home.
The IRS claims it placed a lien on the property due to the previous owner’s unpaid taxes.
4 of 10 – The Closing Disclosure must be given to the borrower how long before closing?
3 business days
5 business days
Prior to the application’s being filed
5 of 10 – Underwriting is an evaluation of?
Risk. Both the borrower’s “creditworthiness” and the property’s value are examined.
The lender’s ability to cover the loan if the borrower defaults.
Interest in the secondary market, so the lender can sell the loan to someone else.
The property’s likelihood to increase in value over the life of the loan.
6 of 10 – Which of the following is NOT one of the main credit reporting agencies in the U.S.?
7 of 10 – The following is NOT required when a borrower applies for a loan?
Ethnicity and minority status disclosures.
Proof of a down payment or deposit.
8 of 10 – Which of the following is an example of a title defect?
Current mortgage balance.
9 of 10 – The lender will hire a _________ to conduct a thorough inspection and analysis of the home.
Real estate agent
10 of 10 – Which of the following is NOT factored into a person’s credit score?
New lines of credit.
Amount of money in savings.
Type of credit.