Preview Questions Loan Officer | Role Specific Skill

Question 1: In the case of a refinancing consultation, what would be the first question a Loan Officer should ask a client?

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If the client prefers to switch from fixed-rate to variable-rate loans

Whether the client's current interest rate and loan terms are favorable compared to market rates

Whether the client is planning to increase or decrease loan amount

Whether the client is considering a cash-out refinance option

Question 2: During a consultation for an auto loan, what should the Loan Officer clarify to a client about the importance of the vehicle's value?

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How the loan-to-value (LTV) ratio can affect the loan terms and interest rate

The importance of comprehensive insurance for the vehicle

How to ensure that the vehicle price fits within the loan limit

The client's credit score and how it affects loan approval

Question 3: How does the loan-to-value (LTV) ratio impact the approval and pricing of a loan?

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A higher LTV guarantees better loan terms

A higher LTV increases the risk for the lender, potentially raising interest rates

LTV does not affect loan pricing

A higher LTV decreases the borrower's monthly payment

Question 4: Which of the following loan products would be most suitable for a borrower who is looking for flexible repayments with variable interest rates?

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Auto loan, typically with fixed interest rates and set repayment terms

Fixed-rate mortgage, where the interest rate is locked in for the loan term

Home Equity Line of Credit (HELOC), which offers revolving credit and adjustable rates

Personal loan, where the interest rate is fixed and payments are predictable

Question 5: What does the amortization schedule of a loan detail?

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The loan amount after each monthly payment

The breakdown of monthly payments into principal and interest over time

The total interest paid over the life of the loan

The total loan amount after adjustments

Question 6: Which of the following documents is required to verify a borrower's current residence for a mortgage loan?

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Lease agreement

Employment verification

Borrower's credit report

Bank statement