David Saks

When the underwriter aquires the credit report of the applicant it will usually contain information pertaining to the applicants debt and payment history for the last ten years.

Is this fact true of false ?

Take your time. The solution is posted below the wildlife photo.

A. False

When information is obtained about a borrower from a credit report the information in the report usually only covers the last seven years, although certain items such as bankruptcies or foreclosures might remain longer.

If you see information that is incorrect in your credit file alert the credit reporting agency and they will inform you of what you must do to correct inaccuracies.

Frederick and Marlene Silverman have a monthly housing expenditure of 1500 dollars, their monthly credit card payments equal 200 dollars, and they have a car note of 225 dollars.

They have a monthly income of 5500 dollars.

What is their debt to income ratio ?

Please take your time. The solution is posted below the wildlife photo.

A. 35%

To find the debt to income ratio add the housing expenses to all of the other monthly debt expenses and then divide the total of the monthly expnses by the monthly income.

1500 housing
+
200 credit cards
+
225 car note
=
1925 total monthly expenses
/ divided by
5500 monthly income
=
0.35 or 35% debt to income ratio

A rule of thumb for a lender when considering a loan application is that the borrower should have been continuously employed on the same job for a  minimum of five years.

Is this true or false ?

Take your time. The solution is posted below the wildlife photo.

A. False

As a general rule the lending underwriter will prefer to see that the applicant has been on the same job for at least two years.

When a lender issues a letter stating the maximum loan amount that the lender will authorize this is know as preconclusion of process.

Is this fact true or false ?

Please take your time. The solution is posted below the wildlife photo.

A. False

When a lender issues a letter stating the maximum amount that the lender will authorize this is known as preapproval.

When the lender issues a letter or preapproval the lender agrees to loan the buyer the funds he or she needs up to a specified amount of money to purchas the home they intend to purchase.

When we talk about loan discount points we're talking about payment for costs which are typically associated with a loan origination fee.

Is this fact true or false ?

Take your time. The soultion is postd below the wildlife photo.

A. False

Discount points are associated with a lender's yield or the rate of return or profit on loan.

The charges which are payable to or by any parties to a real estate transaction always show up on the lender disclosure statement.

Is this fact true or false ?

Take your time. The solution is posted below the wildlife photo.

A. False

Charges which are payable to or by any party to a real estate transaction show up on the settlement statement which will be presented at closing and will reflect credits and charges applicable to the participants in the transaction.

Credit report fees, loan origination fees and appraisal fees are all costs that show up in the loan's APR.

Is this fact true or false ?

Take your time. The solution is posted below the wildlife photo.

A. False

Points paid by the loan borrower, mortgage insurance, interest on the loan, and the loan origination fees are regarded as portions of the total finance charges assessed the borrower.

Appraisal and credit report fees are not.

When a portion of a borrower's monthly mortgage payment is held to be applied later towards property taxes and insurance the money will be held by a trustee.

Is this true or false ?

Take your time. The solution is posted below the wildlife photo.

A. False

Money held for property taxes and insurance are held in escrow established for that purpose by the lender and paid out of the account when property taxes and insurance are due and payable.

If the lender agrees to guarantee a specific interest rate for a specific period of time this is known as discounting the float.

Is this true or false ?

Please take your time. The solution is posted below the wildlife photo.

A. False

If the lender agrees to guarantee a specific interest rate for a specific or certian period of time this is know as a lock-in.

Fees that normally pay the overhead costs of a lender are the loan discount fees associated with the loan.

Is this fact true or false ?

Take your time. The soultion is posted below the wildlife photo.

A. False

Fees than pay the lender's overhead, or costs for administering the loan, are the origination fees.