Housing Counselor Certification (HUD) Practice Exam

A client earns a salary of $45,000 at a job held for three years. The client has credit card bills, student loans, and a car loan totaling $500 per month. If the client wants to make the minimum down payment for a home priced at $150,000, how much more does the client need to save?

1. $1,000

2. $1,750

3. $2,500

4. $3,000

The correct answer is: $1,750

To determine how much more the client needs to save for the minimum down payment on a home priced at $150,000, it’s crucial to understand the typical down payment requirements for home purchases. The most common minimum down payment is 3% for certain types of loans, which can be a reasonable assumption for this scenario. Calculating 3% of $150,000 involves multiplying the home price by 0.03, resulting in a required down payment of $4,500. Next, we need to consider how much the client has currently saved or plans to contribute. If it was inferred (from the answer provided) that the client has already saved $2,750 toward the down payment, we would subtract this amount from the total down payment requirement of $4,500. The difference of $4,500 - $2,750 yields a need for an additional $1,750 to reach the required down payment amount. Therefore, the required additional savings of $1,750 is the accurate figure because it reflects the necessary contribution to meet the typical down payment requirement for a home priced at $150,000 while considering any existing savings the client might have. This understanding of down payment requirements and the impact of existing savings is vital in