CMA Credit Analysis and Borrower Qualification

Question 1

What is the minimum credit score typically required for an FHA loan with a 3.5% down payment?

Accepted Answer

580

Answer

500

Answer

620

Answer

640

Question 2

Which of the following best describes the 'front-end' debt-to-income (DTI) ratio?

Accepted Answer

Monthly housing expense divided by gross monthly income

Answer

Total monthly debt obligations divided by gross monthly income

Answer

Net monthly income minus all debts

Answer

Annual income divided by total loan amount

Question 3

What are the five factors used to calculate a FICO credit score, listed in order from most to least impactful?

Accepted Answer

Payment history, amounts owed, length of credit history, new credit, credit mix

Answer

Credit mix, new credit, payment history, amounts owed, length of credit history

Answer

Amounts owed, payment history, new credit, credit mix, length of credit history

Answer

Length of credit history, payment history, credit mix, amounts owed, new credit

Question 4

What is a 'rapid rescore' in the mortgage qualification process?

Accepted Answer

A fee-based service that expedites credit report updates to reflect recent paydowns or corrections within days

Answer

A penalty assessed when a borrower applies for too many loans

Answer

A lender's internal process for recalculating DTI ratios

Answer

A credit bureau service that removes all negative items within 30 days

Question 5

Under conventional lending guidelines, what is the maximum back-end DTI ratio typically allowed without compensating factors?

Accepted Answer

43%

Answer

36%

Answer

45%

Answer

50%

Question 6

What does 'tri-merge' credit report mean in mortgage lending?

Accepted Answer

A credit report that combines data from Equifax, Experian, and TransUnion

Answer

A method of averaging three loan applications

Answer

A report that merges credit data with income verification

Answer

A three-year credit history summary