HUD COUNSELOR EXAM ACTUAL EXAM 200 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) |ALREADY GRADED A+

HUD COUNSELOR EXAM 2023-2024 ACTUAL EXAM

200 QUESTIONS AND CORRECT DETAILED ANSWERS

WITH RATIONALES (VERIFIED ANSWERS)

|ALREADY GRADED A+

Fee charged when an account does not have enough money to cover a

purchase and the financial institution loans the money to complete the

payment - ANSWER- Overdraft fee:

Fee charged if there is not enough money in an account to cover a check

payment or other purchase - ANSWER- NSF Fee:

A liquid account is one from which money can be retrieved quickly

without taxes or penalties. It is best not to invest this money because

there would be a cost incurred for any withdrawal from the investment.

The idea is to be able to access the money as soon as the emergency

occurs - ANSWER- Liquid account:

Limited accessibility and good returns - ANSWER- Large purchase

savings account:

Repairing transmission on car - ANSWER- What is a good use of

emergency funds?

Medical bill, car repair, and living expenses during unemployment -

ANSWER- Expenses covered by emergency fund:

School trips, birthday gifts, and electronics - ANSWER- Large purchase

fund:

Low to moderate income individuals and families with earned income

may be eligible for this tax credit. Earned income includes wages,

salaries, tips, and other employee pay. It also includes net earnings from

self-employment from individuals who own or operate a business or

farm. The specific amount of the tax credit is based on a recipient's

amount of the tax credit is based on a recipient's income, marital status,

and number of children - ANSWER- Earned Income Tax Credit (EITC)

Clients who are in post-secondary educational program, or who are

supporting children in a post-secondary program, may qualify for an

educational credit - ANSWER- Educational tax credit:

Those who are working, or actively looking for work, may be eligible

for this credit if they are paying a service to take care of a dependent

(child or adult). Also, a client may claim additional tax credits for any

qualifying child under the age of 17 - ANSWER- Child and dependent

tax credit:

Predatory lenders often offer low introductory rates, sometimes called

teaser rates. - ANSWER- Teaser rates:

Predatory lending tactic. Loan officers require you to act today

immediately, with statements such as "If you don't decide today, you

will lose this great opportunity!" Or "this is your only chance to get a

loan" - ANSWER- Limited time offers:

Loans with confusing or unclear terms, balloon payments, or steep prepayment penalties. Predatory lending practice. - ANSWER- High-risk

loans:

Lenders allow borrowers to finance more money than they need or can

afford. Some lenders will attempt asset-based lending, offering loans

based on the amount of equity instead of borrower's ability to pay.

Predatory lending practice. - ANSWER- Higher loan amounts:

Lenders charge fees for unnecessary or nonexistent products or services,

or may inflate these fees, charging much more than reputable lenders.

Predatory lending practice. - ANSWER- High fees or costs:

Lenders misrepresent costs, using tactics like providing false appraisals

or changing loan terms before closing. Predatory lending practice. -

ANSWER- False or hidden disclosures:

Lenders encourage borrowers to refinance existing loans to collect

additional fees or charge higher interest. Predatory lending practice. -

ANSWER- Loan flipping:

1) Order a fraud alert with the credit reporting agencies

2) Order credit reports from the credit reporting agencies to review and

identify inaccuracies

3) Creat an identity theft report, which involves obtaining an Identity

Theft Affidavit from the Federal Trade Commission (FTC) and filing a

police report - ANSWER- Identity theft checklist:

1) defer most repair, maintenance, and yard work responsibilities and

expenses to the landlord

2) avoid the hassle of paying bills for utilities (sometimes) and property

taxes

3) maintain greater flexibility to move if circumstances change

(uncertainty about a neighborhood, fluctuations in income, or other

reasons) - ANSWER- Renting benefits:

1) obtain greater control over decisions related to environment

2) settle into a community and school

3) avoid home inspections by landlords and other authorities

4) modify home to suit personal preferences

5) qualify for tax benefits, such as deduction for mortgage interest, MIP,

loan discount points or origination fees, and state or local property taxes,

among other potential benefits

6) build equity by making monthly payments - ANSWER- Buying

benefits:

3-4% of the home purchase price - ANSWER- Closing costs:

The average cost due upon signing a lease is 20% of the monthly rent -

ANSWER- Which is not true about upfront costs of renting: