A borrower's employment verification reveals they started a new job 3 weeks ago after being unemployed for 6 months. Their previous employment was stable for 8 years. What is the most likely underwriting decision regarding employment stability?
Correct Answer
B) Require a probationary period completion letter from the new employer
Underwriting guidelines typically require borrowers to have completed any probationary period at their new employment. A probationary period completion letter or confirmation that no probationary period exists is standard when employment is very recent, regardless of previous employment stability.
Why This Is the Correct Answer
Underwriting guidelines typically require borrowers to have completed any probationary period at their new employment. A probationary period completion letter or confirmation that no probationary period exists is standard when employment is very recent, regardless of previous employment stability.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
Under what circumstances can a Qualified Mortgage include a prepayment penalty?
A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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A borrower is purchasing a $300,000 home with a 10% down payment and obtaining PMI. The PMI factor is 0.55% annually. What is the monthly PMI payment that should be included in the front-end DTI calculation?
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