Freddie Mac - Credit Smart Exam Questions With Correct Answers
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Freddie MAC
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Freddie MAC
Freddie Mac - Credit Smart Exam Questions
With Correct Answers
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing payment, which
includes: - answerPrincipal, interest, property tax...
Freddie Mac - Credit Smart Exam Questions
With Correct Answers
The percentage of your gross monthly income that goes toward paying for your housing
expenses is called the "housing expense ratio" and is based on the total housing payment, which
includes: - answer✔Principal, interest, property taxes, homeowner's insurance, mortgage
insurance, homeowner's or condo association fees
Lenders don't include your future housing payment in your debt-to-income ratio, only all other
outstanding debts. - answer✔False
The principal amount is the total amount borrowed. - answer✔True
Do lenders use gross income or net profits when calculating mortgage affordability for self-
employed borrowers? - answer✔Net profits
An escrow account is a special account managed by the borrower that holds funds for property
taxes and property insurance payments. - answer✔False
Having adequate cash reserves demonstrates to your lender that you have responsibly managed
your money and have savings and other assets to fall back on in case of emergency. -
answer✔True
Capital - or cash to close - refers to the funds you need to save in order to cover the cost of down
payment and closing costs. - answer✔True
Acceptable sources of capital include: - answer✔Funds from a family member, funds from a
down payment assistance program or funds from your savings account
Lenders consider investments to be (select all that apply): - answer✔Lenders consider
investments to be IRAs, bonds, CDs, stocks and 401(k) plans.
To determine if you have adequate savings to obtain a mortgage and sustain homeownership,
lenders will average the last six months of your checking and savings account balances. -
answer✔False
The Annual Percentage Rate (APR) is the same as the interest rate. - answer✔False
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