FREE AND STUDY GAMES ABOUT REAL ESTATE FINANCE

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FREE AND STUDY GAMES ABOUT REAL ESTATE FINANCE

EXAM QUESTIONS

Actual Qs and Ans Expert-Verified Explanation

This Exam contains:

-Guarantee passing score -152 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: If borrowers are current on their mortgage, when will their private mortgage insurance automatically be dropped?

Answer:

78% LTV. The Homeowner Protection Act require that PMI be droped when the loan reach 78% of its origination amount. The borrower can request that the PMI be dropped when the loan reach 80%, taking into account improvement &apreciation. Fanie Mae and Fredi

Question 2: A mortgage broker may do all of the following EXCEPT

Answer:

service the loan.Question 3: What is the primary purpose of the Housing Tax Credit (HTC) program?

Answer:

Direct private capital toward creating affordable rental properties Question 4: The borrower must receive a good-faith estimate of all costs on the loan and the property within three business days of application according to the

Answer:

Real Estate Settlement Procedures Act.

Question 5: A consumer recently lost a briefcase containing several different types of bonds.The consumer is concerned that a person finding the briefcase will be able to cash the bonds.This is NOT a concern if the bonds are

Answer:

registered bonds.

Question 6: The ups and downs of real estate activities are described as

Answer:

real estate cycles.Question 7: What is the annual MIP paid monthly on an FHA loan with a contract price of

$150,000?

Answer:

The answer is $150.78. $150,000 × 96.5% = $144,750 × 1.25% = $1,809.38 ÷ 12 = $150.78.Question 8: With a loan guarantee of $104,250, a veteran wishing to purchase a home in Alaska would be eligible for a mortgage loan of

Answer:

$625,500. Alaska is categorized as a high-cost area, so an additional 50% is added to the loan limit. 4 ×

$104,250 = $417,000 × 50% = $208,500 + 417,000 = $625,500.

Question 9: Before a lender decides to foreclose, full consideration is given to all of the following EXCEPT

Answer:

current interest rate.Question 10: What is the PITI on an FHA loan with a price of $150,000 and interest rate of 6% for a 30-year term, annual taxes of taxes of $1,800, and an annual hazard insurance premium of $700?

Answer:

The answer is $1,242.81. $150,000 × 96.5% = $144,750 × 1.75% = $2,533.13 + $144,750 = $147,283.13 final loan amount. Convert annual taxes to monthly: $1,800 ÷ 12 = $150; monthly hazard insurance: $700 ÷ 12 = $58.33; annual MIP paid monthly: $144,750 × 1.2

Question 11: Which of the following is the BEST indicator for the lender that the borrower has abandoned the property?

Answer:

Mail returned and no forwarding address provided Question 12: Under Regulation Z, borrowers applying for an adjustable-rate mortgage must receive all of the following EXCEPT

Answer:

a homebuyer education course.

Question 13: In a lien theory state, who holds the equitable title?

Answer:

Trustor Question 14: When a buyer has insufficient cash for the entire amount required to purchase a house, the seller may provide a portion of the sales price in the form of a junior encumbrance, called a

Answer:

carryback loan.Question 15: A lender may prefer to have a deed of trust instead of a mortgage because

Answer:

foreclosure is accomplished more easily and quickly.Question 16: In what year were Texas residents allowed to start borrowing against their home's equity?

Answer:

1997 Question 17: In the financial world, which loan designation would indicate a very high-risk loan?

Answer:

D

Question 18: In response to the financial crisis that emerged in the summer of 2007, the Fed used special programs designed to do all of the following EXCEPT

Answer:

forgive credit card debt for homeowners facing foreclosure.Question 19: A borrower with a low credit score and limited income has been approved for a high-interest loan that cannot be paid off for three years and charges more than six months' interest as a penalty. This would BEST be described as

Answer:

an abusive prepayment penalty.Question 20: All of the following government programs have the potential to lower a homeowner's monthly mortgage payment EXCEPT

Answer:

Dodd-Frank Act.

Question 21: Which statement regarding a note is FALSE?

Answer:

A note must be tied to either a mortgage or deed of trust.Question 22: When a mortgage loan is fully paid, the borrower (mortgagor) regains full and clear title to the property based on which clause in the mortgage?

Answer:

Defeasance Question 23: What type of clause in a financial instrument allows a borrower to repay the balance of a loan at any time without any restriction or penalty?

Answer:

Prepayment Question 24: An older building being used for storage is valued at $100,000 and produces a net operating income of $12,000 per year. What is the overall capitalization rate for this property?

Answer:

12%. $12,000 ÷ $100,000 = 0.12 or 12%.