P4-43 Quiz

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Question 1 of 6

1. Question
Which of the following is an acceptable way for a lender to verify that a borrower has sufficient funds available to close on a loan?
- A. A verbal statement from the borrower confirming available funds
- B. Two months of current bank statements or verified earnest money that has cleared the borrower’s account
- C. A sales contract showing an earnest money deposit without bank verification
- D. A future paycheck expected prior to closing
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Question 2 of 6

2. Question
Under which loan-to-value (LTV) scenario may the full amount required for down payment, closing costs, and prepaids be provided entirely as a gift?
- A. When the LTV is 95%
- B. When the LTV is 90%
- C. When the LTV is 85%
- D. When the LTV is 80% or less
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Question 3 of 6

3. Question
When may a gift from a relative be pooled with the borrower’s funds to meet the minimum cash down payment requirement?
- A. When the relative providing the gift has lived with the borrower for the last 12 months and will continue to do so
- B. When the gift is deposited after settlement
- C. When the borrower is purchasing a primary residence (regardless of living arrangements)
- D. When the relative provides a notarized gift letter only
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Question 4 of 6

4. Question
Which of the following must be included in a gift letter provided by a relative?
- A. The donor’s credit report and proof of income
- B. The borrower’s loan amount and interest rate
- C. The amount of the gift and transfer date, donor’s name/address/telephone, relationship to the borrower, and a statement that no repayment is expected
- D. A copy of the donor’s tax returns
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Question 5 of 6

5. Question
How must a lender verify that sufficient gift funds are available from a relative?
- A. By accepting the borrower’s written explanation
- B. By documenting the donor’s funds in the donor’s account or the transfer to the borrower (e.g., donor withdrawal slip and borrower deposit slip, or a canceled donor check)
- C. By confirming the donor’s employment
- D. By reviewing the donor’s credit score
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Question 6 of 6

6. Question
If gift funds are not transferred prior to settlement, what documentation is sufficient?
- A. A verbal confirmation from the closing agent
- B. A handwritten note from the donor
- C. A post-closing bank statement
- D. A certified check from the donor provided to the closing agent, plus a copy of the check or a settlement statement showing receipt
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