North Carolina Real Estate Commission NCREC-Broker-N Exam With Confidence Using Practice Dumps

FHA mortgage qualification uses two ratios:

Housing ratio (Front-end): 31% of monthly gross income

Total debt ratio (Back-end): 43% of monthly gross income

Step 1: Calculate max housing (front-end)

31% × $6,800 = $2,108

Step 2: Calculate max total debts (back-end)

43% × $6,800 = $2,924

Subtract monthly debts: $485 + $200 + $1,500 = $2,185

Max mortgage payment allowed = $2,924 − $2,185 = $739

The borrower is limited by the back-end ratio, so the maximum housing expense is $739.

Correct Answer: A

Note: The initial selected answer choice “B. $1,763” would exceed the debt ratio when combined with existing monthly obligations. The correct final answer is A.

—

Commingling is the illegal act of mixing a client’s funds—such as earnest money—with the broker’s personal or business funds. North Carolina law strictly prohibits brokers from depositing trust money (like earnest deposits) into the firm’s general operating account. In this case, the broker used the funds to pay rent, which could also constitute conversion (intentional misuse). But since the question specifically addresses the deposit, the correct answer is B – commingling.

—

Any change to the terms of a binding real estate contract must be made in writing and signed by all parties. In this case, the original Offer to Purchase and Contract remains valid, and the parties are modifying the terms (adjusting the sales price due to damage). This should be documented using a formal amendment. Therefore, the correct answer is C.