MLO Borrower Practice Questions

A borrower obtains a 2-1 buydown mortgage loan with a 30-year term and a 6% note rate. The borrower's payments will be calculated based upon which of the following?

• AA. 4% interest in year 1 and 6% interest in years 2 through 30
• BB. 4% interest in years 1 and 2 and 6% interest in years 3 through 30
• CC. 4% interest in year 1, 5% interest in year 2 and 6% interest in years 3 through 30
• DD. 5% interest in years 1 and 2 and 6% interest in years 3 through 30

Which of the following factors is not required to be taken into account when determining a borrower's ability to repay a loan?

• AA. Current debt obligations, alimony and child support
• BB. Credit history
• CC. Proceeds from the sale of the property securing the loan
• DD. Monthly payment on simultaneous loans

A borrower's monthly debt-to-income ratio is calculated by taking the:

• AA. borrower's gross monthly housing expense divided by the principal, interest, and appraised value.
• BB. eligible total monthly debt obligations, including the monthly housing expense, divided by the borrower's gross monthly income.
• CC. eligible total monthly debt obligations for trade lines greater than 12 months multiplied by the borrower's net monthly income.
• DD. eligible total monthly debt obligations excluding the monthly housing expense divided by the borrower's net monthly income

Which of the following circumstances may indicate fraud with respect to the assets a borrower will use for closing?

• AA. Bank deposits that are not supported by income or other disclosures
• BB. Disclosure of gift funds
• CC. Parental loans disclosed but not yet received
• DD. Borrower's receipt of a large bonus from an employer