Sec5-37*

1. Question

A borrower wants to use alimony income to help qualify for a mortgage loan. What may the creditor review when evaluating the reliability of this income source?

A) Only the borrower’s property tax history

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B) The consistency of past payments and the creditworthiness of the payor

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C) The seller’s equity position in the property

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D) Only the borrower’s checking account balance

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2. Question

A borrower is using child support income to qualify for a mortgage loan. What continuance requirement generally applies to this income source?

A) The income must continue for at least 6 months

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B) The income must continue for at least 1 year

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C) The income must continue for at least 3 more years

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D) The income only needs to continue until closing

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3. Question

A borrower applying for a conventional loan receives gift funds from a relative for part of the down payment. What is the general requirement regarding the borrower’s own contribution?

A) The borrower is never required to contribute personal funds

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B) The borrower must provide the first 5% of the down payment, and the rest may be a gift from a relative

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C) All funds must come entirely from the borrower’s own savings

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D) Only FHA loans allow gift funds for down payments

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4. Question

A relative who has lived with the borrower for the last 12 months intends to occupy the property after closing. Under conventional loan guidelines, how much of the down payment may this relative provide as a gift?

A) No portion of the down payment may be gifted

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B) Only 5% of the down payment may be gifted

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C) Up to 50% of the down payment may be gifted

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D) 100% of the down payment may be provided by the relative

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5. Question

A borrower using an FHA loan receives gift funds to cover the required cash to close. What do FHA and VA guidelines generally permit?

A) Only half of the required cash to close may come from gifts

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B) Gift funds are prohibited on FHA and VA loans

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C) 100% of the required cash to close may be a gift

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D) Only employers may provide gift funds on FHA loans

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6. Question

A borrower receives gift funds from a donor on an FHA loan transaction. Which of the following is an acceptable donor source under FHA or VA guidelines?

A) An unrelated property seller

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B) A close friend with a clearly defined relationship

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C) The appraiser involved in the transaction

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D) The title company employee handling closing

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7. Question

A lender is reviewing gift funds used in a mortgage transaction. What verification requirement generally applies to donor gift funds?

A) The borrower’s verbal explanation alone is sufficient

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B) The donor’s gift funds must be verified through the donor’s bank or source of funds

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C) Gift funds never require documentation

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D) Only cash deposits are acceptable as proof of gift funds

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8. Question

A lender reviewing a borrower’s bank statements notices a deposit significantly larger than the borrower’s normal income pattern. Under Fannie Mae guidelines, what is considered a large deposit?

A) Any deposit over $500

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B) Any deposit larger than one mortgage payment

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C) A single deposit exceeding 50% of the total monthly qualifying income for the loan

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D) Any deposit made within 10 days of closing

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9. Question

A lender identifies a large unexplained deposit on a borrower’s bank statement during underwriting. What must the borrower provide?

A) A new appraisal of the property

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B) The source of the funds

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C) A signed purchase contract amendment

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D) A letter from the real estate agent only

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10. Question

A borrower wants to use separate maintenance payments as qualifying income. What may the creditor consider when evaluating this income?

A) The amount and probable continuance of the income based on the likelihood of continuance

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B) Only whether the borrower owns additional property

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C) Only the borrower’s tax refund history

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D) Whether the seller agrees to the loan terms

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11. Question

A borrower receives regular alimony payments and wants to use them to qualify for a mortgage. Besides evaluating continuance, what additional factor may the creditor review?

A) The creditworthiness of the payor and consistency of past payments

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B) The appraiser’s licensing history

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C) The seller’s debt-to-income ratio

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D) The property’s future resale value only

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12. Question

A borrower is relying on child support income to qualify for a mortgage. What minimum continuance period generally applies to this income source?

A) The income must continue for at least 90 days

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B) The income must continue through the first mortgage payment only

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C) The income must continue for at least 3 more years

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D) The income must continue indefinitely with no stated timeframe

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