Pop Quiz

Multiple Choice:

1. Loan pre-approval is a good idea because:
a) It means your loan is almost fully approved
b) it gives you an advantage when it comes time to make an offer on a home
c) it establishes your buying power with sellers
d) it lets you close quickly on a home
e) all of the above

2. The reasons to obtain your credit report before making a loan application include which of the following:
a) If there's bad news involved, you need to be the first to know, not your lender
b) You can correct any mistakes by the credit bureau before they reach your lender
c) You can pay a loan shark to have your credit history wiped out
d) It can take weeks to correct any mistakes
e) You might have overlooked or forgotten a problem with your credit.

3. The information a lender will need to pre-approve your loan include which of the following:
a) W-2 forms or profit/loss statements if self-employed
b) Pay stubs
c) Bank statements
d) Tax returns
e) All of the above

4. Which of the following is NOT an advantage to alternative documentation loans?
a) Verifying your income can be easier if you're self-employed
b) It saves aggravation
c) It gets around the hassle of providing verification of employment, income and assets
d) There's no down payment
e) It can be a quicker loan to obtain

5. Loan programs that assist buyers with the down payment include which of the following:
a) FHA-insured loans for moderate- to low-incomes
b) Fannie Mae Community Home Buyer's loans with 3 percent down or less
c) VA-insured loans for veterans and active duty personnel
d) Nonprofit housing organization loans
e) All of the above

True or False:

6. If your loan is denied because of your credit report, a credit reporting company must provide you a copy of your report upon request within 30 days of your loan denial.
True False

7. The time to decide if your final choice of a lender is the right one is BEFORE you apply for a loan.
True False

8. If you have a poor credit history, it might take two years of paying your bills on time to qualify for a reasonable mortgage loan.
True False

9. Making a larger down payment can lower your debt-to-income ratio and make it easier to qualify for a larger home loan.
True False

10. Asking the seller to pay closing costs will free up more of your money for the down payment.
True False

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