Client Relations and Financial Advisory Flashcards
7 cards from real CMC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Client Relations and Financial Advisory flashcards as text
A client with a 620 credit score asks about their loan options. What is the most appropriate first step for the mortgage consultant?
Answer: Review the client's full credit report to identify specific derogatory items
Reviewing the full credit report allows the consultant to identify the root causes and provide tailored advice on loan options and credit improvement.
Which disclosure must a mortgage consultant provide to a client within three business days of receiving a loan application under RESPA?
Answer: Loan Estimate
TRID requires lenders to deliver a Loan Estimate within three business days of receiving a completed loan application.
A client is choosing between a 15-year and 30-year fixed-rate mortgage. Which factor most directly affects the total interest paid over the life of the loan?
Answer: Loan term length
A shorter loan term means fewer payment periods, dramatically reducing total interest paid even though monthly payments are higher.
When a client expresses concern about rising interest rates, which product should a consultant typically discuss to provide payment certainty?
Answer: Fixed-rate mortgage
A fixed-rate mortgage locks in the interest rate for the life of the loan, eliminating the risk of payment increases due to rate changes.
A client's debt-to-income ratio is 47%. Most conventional loan programs require a maximum DTI of what percentage?
Answer: 45%
Fannie Mae and Freddie Mac generally allow a maximum DTI of 45% for conventional loans, though DU/LP may approve up to 50% in some scenarios.
Which ethical obligation requires a CMC to disclose all material facts about a loan product that could affect the client's decision?
Answer: Duty of full disclosure
The duty of full disclosure requires mortgage consultants to share all material information so clients can make informed decisions.
A client asks why their Closing Disclosure shows higher fees than the Loan Estimate. Which category of fees is legally permitted to increase without limit?
Answer: Required third-party services where the consumer chose a provider not on the lender's list
When a consumer selects a third-party service provider not on the lender's written list of approved providers, those fees are not subject to tolerance limits.