Sec4-P41

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Question 1 of 8

1. Question
A borrower applies for a mortgage using income that has varied from year to year. The loan originator notes that the borrower also owns additional real estate and liquid assets that could be sold if future income decreases. The loan originator must determine whether this income may be used for qualification.
- A) The income may not be used because it is not consistent
- B) The income may be used only if it is guaranteed by contract
- C) The income may be averaged and used if the borrower has additional assets to support repayment
- D) The income must be excluded unless it has been stable for five years
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Question 2 of 8

2. Question
A borrower receives Social Security retirement income based on their own work history. The loan originator reviews whether this income may be used for qualification.
- A) It may not be used because it is government income
- B) It may be used only if limited to three years
- C) It may be used because it has no defined expiration date
- D) It may be used only with IRS transcripts
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Question 3 of 8

3. Question
A borrower receives Social Security income on behalf of a family member. The loan originator evaluates whether this income may be used to qualify.
- A) The income may never be used
- B) The income may be used if documentation shows at least three years remaining
- C) The income may be used without documentation
- D) The income may only be used for reserves
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Question 4 of 8

4. Question
A borrower receives long-term disability income from a private insurance provider. The loan originator reviews what documentation is required.
- A) No documentation is required
- B) Only bank statements are required
- C) A disability policy or benefit statement must be obtained
- D) The income cannot be used
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Question 5 of 8

5. Question
A borrower receives long-term disability income that requires periodic re-certification but has no defined end date. The loan originator evaluates whether the income may be used.
- A) The income must be excluded
- B) The income may be used because re-evaluation is not an expiration date
- C) The income may only be used for reserves
- D) The income must be discounted
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Question 6 of 8

6. Question
A borrower is currently receiving short-term disability benefits that will convert to long-term disability. The loan originator determines which income amount should be used.
- A) The higher short-term benefit
- B) The long-term disability amount
- C) An average of both amounts
- D) Neither amount may be used
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Question 7 of 8

7. Question
A borrower claims disability income but cannot provide documentation verifying eligibility or duration. The loan originator evaluates whether the income may be used.
- A) The income may be used with verbal confirmation
- B) The income may be used with a written explanation
- C) The income may not be used without proper documentation
- D) The income may be used only for reserves
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Question 8 of 8

8. Question
A borrower’s income includes both capital gains and disability income. The loan originator evaluates whether both may be used for qualification.
- A) Only one income source may be used
- B) Both may be used if documentation requirements are met
- C) Disability income replaces capital gains
- D) Capital gains must be excluded
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