What act came about after the assassination of MLK?
The Civil Rights Act of 1968
A client does not receive a written monthly statement from the
... [Show More] credit card company. Which credit law could this omission violate?
Fair Credit Billing Act
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?
Answer is 728. 40x15=_x52_/12=_.28=728
Front end ratio for Conventional Loan
28%
Back End ratio
Only calculate if you have expenses in the problem. Only include debts that appear on Credit report.
If they say Debt to income ratio :
they are looking for Back End Ratio
If it says housing ratio :
Calculate front end
If they say "What is the highest monthly mortgage payment" and they give you expenses:
You do both front & back end & choose the lowest total
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?
2300-450=_X.32=592
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)?
ANSWER IS 30%
1250+88/4460
How to solve for back end ratio
back end ratio = total monthly debt expenses/ gross monthly income
A client earns a salary of $45,000 at a job held for three years. The client has credit card bills, student loans, and a car loan totaling $500 per month. The client has already saved $3,500 for a down payment and is using an FHA Energy Efficient Mortgage (EEM).If the client wants to make the minimum down payment for a home priced at $150,000, how much more does the client need to save?
$1,750
$2,250
$4,500
$5,250
Down payment for EEM is 3.5% so you take 150,000 x .035=5250-3500=$1750
EEM
Energy Efficient Mortgage
A type of FHA loan
front end: 33%
back end max: 45%
Which type of assistance administered by a public housing authority allows for location flexibility?
Project-based vouchers
USDA
Tenant-based vouchers
FHA
Tenant-based vouchers
A client's payment history affects which factor of creditworthiness?
Collateral
Character
Capital
Capacity
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