Mortgage loan origination # 2 Final Mometrix

According to the passage, what is the most common source of down payment funds?

• Investment accounts

• Checking and savings accounts

• Gift funds

• Proceeds from personal property sale

Fill in the blank: The Federal Housing Administration (FHA) rules allow 'mattress money' or cash saved at home to be used for a down payment.

• True

• False

What are reserve funds?

• Assets used for the down payment

• Liquid assets a borrower has on hand after closing on a mortgage

• Funds from the sale of personal property

• Unacceptable funds for mortgage purposes

Fill in the blank: Most lenders measure reserves in _______.

• months

• years

• dollars

• weeks

Which of the following is NOT an acceptable source of reserve funds?

• Checking and savings accounts

• Money markets

• Borrowed funds

• Certificates of deposit (CDs)

Which of the following are examples of liabilities that must be listed on a Form 1003 mortgage application?

• Monthly loan payments, car loans, credit cards, real estate loans

• Grocery bills and entertainment expenses

• Vacation costs and travel expenses

• Utility bills only

On a mortgage application, liabilities are ______ from assets to compute a borrower's net worth.

• subtracted

• added

• multiplied

• divided

Lenders prefer applicants with high levels of credit card debt because it shows they can manage debt well.

• True

• False

Which document might self-employed workers need to provide instead of W-2s and pay stubs when applying for a mortgage?

• IRS Form 4506-T

• High school diploma

• Driver's license

• Social Security card

According to FHA guidelines, income from which of the following sources can be used to qualify a borrower for a mortgage?

• Social Security Disability Insurance

• Supplemental Security Income

• Social Security income

• All of the above