Home Buying and Mortgage Guide, Exams of Nursing

Download Home Buying and Mortgage Guide and more Exams Nursing in PDF only on Docsity! HUD Practice Test Questions with Correct Answers Which document is most important when working with a client to develop an initial budget as part of a Client Action Plan? - ✅✅✅Pay Stub A client would like to purchase a home within one year. The client is motivated to increase household income as a way to save for a down payment and qualify for a loan. Which is the best solution for the client to reach this goal? - ✅✅✅Find a second job A credit report may contain which information? - ✅✅✅The number of accounts in collection status Six months ago a client left a job as a reporter to start a business in the retail industry. To prepare to buy a house, the client closed credit card accounts and has been using savings to pay down credit card debt and collections. The client has not been able to save much for a down payment with all the debt payments but knows about an affordable homeownership program that only requires a 1% down payment with an FHA loan. What might result from the client closing the credit card accounts? - ✅✅✅It increases credit utilization, causing a negative impact on the credit score. Which action would a client take to improve a credit score? - ✅✅✅Pay delinquent accounts A client does not receive a written monthly statement from the credit card company. Which credit law could this omission violate? - ✅✅✅Fair Credit Billing Act A client shopping for a mortgage loan presents a housing counselor with an offer from a local mortgage lender. The interest rate on the offer is 7.5% for a 30-year fixed rate mortgage with a 20% down payment required. The counselor reviews the client file and determines the client's credit score is 725 and the client's total debt-to-income ratio is 20%. - ✅✅✅"I am unable to determine whether the loan is predatory, but I suggest you shop around with other lending sources." Which action should a counselor recommend a client take first after discovering identity theft? - ✅✅✅File an identity theft report In which situation would a client's responsibilities, recurring costs, and upfront costs be evaluated? - ✅✅✅When weighing housing options A client works 40 hours a week making $15 an hour. What is the highest monthly mortgage the client can afford based on income if the client secures a conventional loan? - ✅✅✅$728 Which type of government insured loan was created for financing homes in rural areas? - ✅✅✅USDA A client keeps having budget problems due to unexpected expenses. Which financial tool would best assist this client to prepare for unexpected expenses and avoid increasing credit usage? - ✅✅✅Emergency Funds A client has a monthly household income of $2,300, monthly debt payments of $450, and an optimal monthly housing ratio of 32%. What is the client's optimal monthly housing payment? - ✅✅✅$736 Use Front-End Ratio What is the back-end ratio for a client with a monthly housing expense of $1,250, a monthly total of $88 in other consumer debt payments, and a gross household income of $4,460 per month (rounded to the nearest whole percent)? - ✅✅✅30% A client seeking to purchase is trying to decide between an FHA-insured mortgage and another mortgage insured by private mortgage insurance. Which is a distinguishing difference between these two types of mortgage insurance? - ✅✅✅FHA-insured mortgages generally require payment of mortgage insurance premiums for the life of the loan. Many private mortgage insurance programs may allow for their removal after paying down the loan to below a 78% loan-to-value level. Which borrower information is contained in the Uniform Residential Loan Application (URLA)? - ✅✅✅Asset information In order to comply with the Know Before You Owe rule, which disclosures were replaced with new versions that more clearly outline mortgage terms to borrowers? - ✅✅✅Good Faith Estimate (GFE) and HUD-1 Settlement Statement Which government regulation prohibits a lender from discriminating against a borrower who uses public assistance to qualify for a mortgage loan? - ✅✅✅Equal Credit Opportunity Act (ECOA) Which item would affect the cost of earthquake insurance? - ✅✅✅Structural material For a client whose most recent rental history is unfavorable, which initial strategy should a housing counselor recommend to increase a potential landlord's willingness to rent to the client? - ✅✅✅Complete a tenant responsibilities and obligations course conducted by a housing counselor. Which entity would be most likely to issue a Housing Choice Voucher? - ✅✅✅Local housing authority What is the purpose of the Veterans Affairs Supportive Housing (VASH) program? - ✅✅✅To end veteran homelessness A tenant's apartment building has been sold. The new owners have informed the tenant that the rent will immediately increase by $100 a month despite having four months left on the written lease. Which best describes the situation? - ✅✅✅New landlord has to honor the existing lease Which is a typical responsibility of a landlord? - ✅✅✅Repairing a leak in the roof A client is currently renting month to month (tenancy at sufferance). What advice should a housing counselor recommend to better secure the housing? - ✅✅✅Seek a new written lease agreement Which circumstance is generally covered by renter's insurance? - ✅✅✅A pipe burst in the apartment above the tenant's unit and causes water damage to the tenant's personal belongings. Which family is most likely to qualify for the Earned Income Tax Credit (EITC)? - ✅✅✅A individual employed part time in a minimum wage job Delinquency on which type of payment can cause a lien to be placed on a client's property? - ✅✅✅Homeowners association dues Which is a possible outcome for member residents if a homeowners association (HOA) imposes a community assessment? - ✅✅✅Residents would be required to pay a share of expenses related to capital improvements to the common areas. A homeowner has decided to remodel the basement over the next 12 months. The project should cost just under $24,000, and the hope is to borrow the money at a very low interest rate that can be paid off over a longer period of time. Which home financing option would work best? - ✅✅✅HELOC A potential homebuyer with minimal savings for a down payment and a low credit score is most likely to qualify for which mortgage? - ✅✅✅USDA Which is the most significant benefit of using a real estate agent? - ✅✅✅Negotiating the sale Which item is critical to consider when working with a client to prepare a household system maintenance plan? - ✅✅✅Target replacement date Which strategy most effectively increases a home's energy efficiency? - ✅✅✅Increase attic insulation Which best describes the ENERGY STAR program? - ✅✅✅A voluntary program that helps businesses and individuals save money and protect the climate through superior energy efficiency. Which action would most likely increase the energy efficiency of a home? - ✅✅✅Repair caulking on windows. Which should a housing counselor recommend that a client include in a household maintenance plan? - ✅✅✅Coverages for home warranty Which item should be included in an emergency preparedness plan? - ✅✅✅Identify a meeting location outside the immediate area. A client with limited financial resources wants to improve safety in the home to prepare for natural disasters. Which is the best resource for the client to use in researching this topic? - ✅✅✅Ready.gov Which would be the best location to identify in a household emergency preparedness plan as a safe place to meet in the event of an evacuation? - ✅✅✅A motel in a neighboring community What was the primary purpose of the Making Home Affordable program? - ✅✅✅To assist homeowners in avoiding foreclosure When a housing counselor is assisting a low-income client in danger of eviction, which referral would be most appropriate? - ✅✅✅Legal aid services Which strategy used by an unemployed client will most likely result in the client moving out of a shelter into permanent affordable housing? - ✅✅✅Participate in the shelter's transitional housing programs. A client recently experienced an unexpected car expense, which resulted in the client using half the rent to pay for the expense. The client, who still has a full-time job, would like to avoid making a late payment. Which resource should a housing counselor recommend first? - ✅✅✅Contact United Way 211 A counselor is working with a client who has recently been evicted. What would be the most appropriate housing referral? - ✅✅✅Local emergency shelters A tenant has a Housing Choice Voucher for a two-bedroom apartment but lives in a three- bedroom apartment and pays the difference in rent. Due to a recent job change, the tenant is behind on rent but wishes to keep the voucher. What should the counselor encourage the client to do? - ✅✅✅Move into a two-bedroom unit to reduce costs and negotiate a repayment plan Which practice is a legal exception to the Fair Housing Act? - ✅✅✅Making housing operated by a religious organization unavailable to those who are not members of the organization Which practice remained legal after the passage of the Civil Rights Act of 1964? - ✅✅✅** Which are protected characteristics under the federal Fair Housing Act? - ✅✅✅Race, religion, disability Which is a potential violation of the Fair Housing Act? - ✅✅✅An apartment owner only rents ground-level apartments to tenants of Asian ethnicity. A single, gay, African-American parent with four kids is turned away from a property because the landlord does not want the kids to destroy the property. Which protected characteristic of discrimination most likely fits this case? - ✅✅✅Familial status Which HUD program provides funding to nonprofits that assist people who may have been victims of housing discrimination? - ✅✅✅Fair Housing Initiatives Program (FHIP) When filing a fair housing complaint, why is it important to provide the date of the alleged violation? - ✅✅✅Because complaints are only valid if they are filed within a given period of time While meeting with a housing counselor, a client describes a possible housing discrimination situation. Which is the best way to handle the violation? - ✅✅✅File a complaint online with HUD Which is a campaign to inform the public about fair housing rights? - ✅✅✅Affirmatively Furthering Fair Housing Program