Client Assessment & Loan Structuring Flashcards
7 cards from real CMPS 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 Assessment & Loan Structuring flashcards as text
A self-employed borrower shows strong business revenue but minimal personal tax returns due to deductions. Which loan program best addresses this scenario?
Answer: Bank statement loan
Bank statement loans use 12-24 months of bank deposits to qualify self-employed borrowers instead of tax return income.
When calculating a borrower's effective income from overtime pay, what is the standard documentation period required by most lenders?
Answer: 2 years
Most lenders require a 2-year history of overtime pay and confirmation it is likely to continue to use it as qualifying income.
A client wants to maximize cash flow after closing. Which loan structure best achieves this objective?
Answer: 30-year fixed-rate mortgage
A 30-year fixed-rate mortgage produces the lowest required monthly payment, maximizing the borrower's retained monthly cash flow.
Which of the following best describes the purpose of a loan comparison worksheet in the CMPS planning process?
Answer: To help clients evaluate multiple loan options side by side
A loan comparison worksheet allows clients to objectively compare costs, payments, and long-term financial impact of different mortgage options.
A borrower has a DTI ratio of 48% and is applying for a conventional loan. What is the most appropriate next step for the mortgage planner?
Answer: Explore debt payoff scenarios or alternative loan programs that allow higher DTI
A planner should explore solutions such as paying down debt, increasing income documentation, or using programs with higher DTI thresholds before concluding the client cannot qualify.
When structuring a mortgage for a client nearing retirement, which factor should receive the highest priority in the planning conversation?
Answer: Aligning the loan payoff date with anticipated retirement income changes
For pre-retirees, aligning the mortgage payoff or payment structure with projected retirement income ensures long-term sustainability.
Which client scenario would most benefit from an adjustable-rate mortgage (ARM) recommendation?
Answer: A client who plans to sell or refinance within 5-7 years
ARMs offer lower initial rates that benefit clients with a defined short-term ownership horizon before the rate adjustment period begins.