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 married couple files taxes jointly and one spouse has significant student loan debt in income-driven repayment. How should the planner calculate the monthly debt obligation for DTI purposes?
Answer: Use the actual IDR payment shown on credit report
For income-driven repayment plans, most conventional guidelines allow use of the actual documented monthly payment if greater than zero.
What is the primary purpose of conducting a financial needs analysis before recommending a mortgage product?
Answer: To understand the client's complete financial picture and recommend the most suitable product
A financial needs analysis ensures the mortgage recommendation aligns with the client's overall financial goals, not just their qualification limits.
A borrower receives annual bonuses that represent 30% of their total compensation. How should this income be treated for qualification?
Answer: Average the bonus income over 2 years if it has a 2-year history and is likely to continue
Bonus income with a 2-year history can be averaged and included in qualifying income when the employer confirms it is likely to continue.
Which of the following is a key indicator that a client may benefit from a cash-out refinance rather than a HELOC?
Answer: The client wants a fixed rate and a lump sum for a specific one-time expense
A cash-out refinance is preferable when the client needs a fixed, lump-sum amount with predictable repayment, as opposed to revolving credit access.
A client's net worth statement shows significant assets but low documented income. Which loan option is most appropriate to explore?
Answer: Asset depletion or asset-based income qualification
Asset depletion programs allow lenders to convert verified assets into an imputed monthly income stream for qualification purposes.
When reviewing a client's credit report, which factor has the greatest weight in FICO score calculation?
Answer: Payment history
Payment history accounts for approximately 35% of a FICO score, making it the single most influential factor.
A borrower has two mortgages: a primary residence and a rental property. How should the rental income be treated in a new loan application?
Answer: Rental income may be used if documented on Schedule E with a 2-year history, net of expenses
Schedule E rental income averaged over 2 years, after allowable expenses and depreciation add-back, is the standard qualifying income methodology.