A borrower wants to shop for homes in multiple price ranges. They have been pre-qualified for $400,000 but want to look at homes up to $500,000. What should the MLO recommend?
Correct Answer
B) Suggest they get pre-approved to better understand their actual buying power
Since pre-qualification is based on unverified information, the MLO should recommend pre-approval to provide a more accurate assessment of the borrower's actual loan capacity based on verified financial documentation. This prevents disappointment and wasted time looking at unaffordable properties.
Why This Is the Correct Answer
Since pre-qualification is based on unverified information, the MLO should recommend pre-approval to provide a more accurate assessment of the borrower's actual loan capacity based on verified financial documentation. This prevents disappointment and wasted time looking at unaffordable properties.
More Origination Questions
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For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
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An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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