Mortgage Mortgage Underwriting and Financial Calculations Questions and Answers 2

Question 1

A borrower has a gross monthly income of $8,500 and total monthly debt payments of $3,230. What is their debt-to-income (DTI) ratio?

Accepted Answer

38%

Answer

42%

Answer

35%

Answer

45%

Question 2

Which of the following would most likely cause an underwriter to issue a conditional approval rather than a clear-to-close?

Accepted Answer

An unexplained large deposit in the borrower's bank statement

Answer

A credit score of 740

Answer

A stable two-year employment history

Answer

A loan-to-value ratio of 75%

Question 3

When calculating housing expense ratio for a conventional loan, which cost is NOT typically included?

Accepted Answer

Auto loan payments

Answer

Property taxes

Answer

Homeowner's insurance

Answer

Private mortgage insurance

Question 4

A property appraises at $280,000 but the purchase price is $295,000. If the borrower is putting 10% down, what is the maximum loan amount the lender will approve?

Accepted Answer

$252,000

Answer

$265,500

Answer

$280,000

Answer

$295,000

Question 5

An underwriter discovers that a borrower's income is derived 60% from base salary and 40% from overtime. What is the standard requirement for qualifying the overtime income?

Accepted Answer

A two-year history of receiving overtime with likelihood of continuance

Answer

Overtime income from the most recent pay stub only

Answer

A written guarantee from the employer that overtime will continue

Answer

Overtime income is never allowed for qualification purposes

Question 6

Which reserves requirement is most common for a borrower purchasing a single-unit primary residence with a conventional loan?

Accepted Answer

Zero to two months of PITI payments

Answer

Six months of PITI payments

Answer

Twelve months of PITI payments

Answer

Twenty-four months of PITI payments