What is the primary purpose of conducting a client financial assessment before structuring a mortgage?
A financial assessment ensures that the mortgage solution aligns with the borrower's income, debt, and long-term goals.
Which of the following factors is MOST critical in assessing a borrower’s loan eligibility?
Credit score is a key factor in determining the risk level and terms of the loan.
What is debt-to-income (DTI) ratio used for in loan structuring?
DTI helps lenders assess a borrower's ability to repay by comparing monthly debt obligations to income.
Why is documenting income sources important in mortgage planning?
Documentation supports income verification and compliance with lending standards.
How can a mortgage professional improve loan structuring for self-employed clients?
Analyzing tax returns, business income trends, and adjusting for non-cash deductions ensures accurate financial representation.
What role does loan-to-value (LTV) ratio play in structuring a mortgage?
LTV impacts the loan's risk profile, insurance requirements, and interest rate.
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What is the benefit of using a fixed-rate mortgage for long-term planning?
Fixed-rate mortgages provide predictable monthly payments and interest rates.
Why is it important to tailor loan options to a client’s financial goals?
Customization ensures the mortgage strategy supports future needs and lifestyle.
What tool is often used to evaluate multiple loan scenarios for a client?
Loan comparison calculators help analyze different interest rates, terms, and monthly payments.