Practice Test Geeks(CMPS) Certified Mortgage Planning Specialist Practice Test
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Homeowner Cash Flow Scenarios 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 Homeowner Cash Flow Scenarios flashcards as text

  1. A homeowner receives a $15,000 tax refund and asks their mortgage planner about using it. Which application produces the best guaranteed cash flow improvement?

    Answer: Applying as a lump-sum principal curtailment

    A lump-sum principal curtailment permanently reduces the loan balance, lowering future interest charges and improving long-term cash flow at the mortgage's interest rate.

  2. A homeowner's property taxes increase by $200/month mid-year. If they have an escrow account, what is the most likely immediate cash flow impact?

    Answer: Their total monthly payment increases at the next escrow analysis

    Escrow accounts are analyzed annually, so the higher tax obligation triggers a payment adjustment at the next scheduled escrow analysis.

  3. What does positive cash flow from a primary residence most commonly refer to in mortgage planning?

    Answer: Monthly income minus all housing expenses yielding a surplus

    Positive cash flow in primary residence planning means monthly take-home income exceeds all housing-related expenses, leaving a monthly surplus.

  4. A married couple has a combined gross income of $10,000/month. Their front-end DTI limit is 28%. What is the maximum allowable monthly housing payment?

    Answer: $2,800

    $10,000 × 28% = $2,800 maximum monthly housing payment under standard front-end DTI guidelines.

  5. A homeowner in the 22% federal tax bracket pays $18,000 in mortgage interest annually. Assuming they itemize, what is the after-tax cost of that interest?

    Answer: $14,040

    $18,000 × (1 - 0.22) = $14,040 after-tax cost of mortgage interest when itemizing deductions.

  6. A homeowner is evaluating a cash-out refinance to fund home improvements. Which factor most directly determines whether the refinance improves monthly cash flow?

    Answer: Whether the new payment is lower than the existing payment

    Cash flow is directly impacted by whether the new all-in monthly payment is less than the current payment, since that determines whether monthly outflows increase or decrease.

  7. A homeowner uses a debt consolidation refinance to roll $30,000 in credit card debt into their mortgage. Their mortgage payment increases by $180/month but they eliminate $900/month in credit card minimums. What is their net monthly cash flow improvement?

    Answer: $720

    Net cash flow improvement = $900 eliminated minus $180 increase = $720/month improvement.