NC Real Estate Final Exam 3 Flashcards

NC Real Estate Final Exam 3 Flashcards A loan in which the lender is making regularly scheduled

payments to the borrower would be referred to as a:A.

graduated payment loanB. negative amortization loanC.reverse annuity mortgage (RAM)D. package loan reverse annuity mortgage (RAM) A tenant has signed a six-month lease that stipulates it shall convert to month to month if the tenant continues to occupy and pay rent beyond the initial term. What is the maximum security deposit that is permitted under the NC Residential Tenant Act?A. one monthB. one and a half monthsC. two monthsD. six months two months An apartment building generates a monthly gross income of $6,000. Monthly managerial expenses total $1,000.Monthly taxes total $300. Monthly debt service totals $2,675. Monthly repairs and maintenance total $1,100.What is the building's monthly net operating income?A.

$925B. $1,225C. $3,600D. $3,900

$3,600The building produces $72,000 annually ($6,000 x

12). The operating expenses include: $12,000 managerial

expenses ($1,000 x 12); $3,600 for taxes ($300 x 12); and $13,200 for repairs ($1,100 x 12).$72,000-$12,000-$3,600-$13,200 = $43,200 annual net operating income (NOI)÷12 = $3,600 monthly NOI.In order to complete their purchase of a home, a buyer is required to get a percolation test. The percolation test

relates to:A. the potability of the well's drinking waterB. the

presence of hazardous and toxic substances on the propertyC. the soil suitability test for the septic systemD.verification that the home is connected to the city sewer the soil suitability test for the septic system Jack is a provisional broker working with ABC Realty, a firm that specializes in the representation of sellers. At an open house, Jack meets a buyer who is interested in purchasing one of his listings. The buyer is working with a broker from XYZ Realty. Two days later, an offer is delivered to Jack.He takes it to his seller on July 5, who accepts and signs it.Jack delivers the signed contract to the agent on July 8, and the agent delivered the signed contract to the buyer on July 10. On July 11 the agent makes a phone call and confirms with Jack that the parties have a valid contract.When did the contract become effective?A. on July 5 when the seller fully executed itB. on July 8 when the contract was delivered to the agentC. on July 10 when the contract was delivered to the buyerD. on July 11 when the existence of the contract was verified on July 8 when the contract was delivered to the agent A homeowner obtaining a mortgage has an automatic three-day rescission (right to cancel) due to which federal

law under what circumstances:A. due to RESPA when the

loan involves their primary residence and is a first

mortgageB. due to Regulation Z when the loan is for the refinance of a primary residenceC. due to the Equal Credit Protection Act on owner-occupied residencesD. due to RESPA on federally insured, 1-4 unit properties due to Regulation Z when the loan is for the refinance of a primary residence

In an option contract, which of the following is correct:A.

The option is enforceable by the optionee on the

optionor.B. The optionor only can enforce the contract.C.The contract is enforceable by both the optionor and the optionee.D. The option is enforceable by the optionor on the optionee.The option is enforceable by the optionee on the optionor.

The most popular and utilized FHA loan program is:A. an

FHA 203(b) fixed rate loanB. an FHA 3/1 armC. an FHA investor programD. an FHA HELOC program an FHA 203(b) fixed rate loan Bill is buying a house for $120,000 and making a 10% down payment and borrowing the balance at 6.5% for 30 years. His principal and interest payment is $682.63. What is the principal loan balance remaining after Bill's first monthly payment?A. $119,902.44B. $107,902.37C.

$107,317.44D. $107,956

$107,902.37The loan amount is $108,000 ($120,000 x 90%). $108,000 x 6.5% = $7,020 annual interest.$7,020÷12 = $585 monthly interest. $682.63-$585 = $97.63 principal reduction. $108,000-$97.63 = $107,902.37 balance after first payment.Using the 28/36 rule, how much annual income must one have to qualify for a $120,000 loan at 7% for 25 years if the proposed PITI will be $982 and the borrower has other monthly recurring debts of $745?A. $57,566B. $42,085C.

$74,014D. $24,833

$57,566The housing expense of $982÷.28 (28%) = $3,507.14 per month or $42,085 annually. The total debt will be $1,727 (housing $982 + recurring of $745).$1,727÷.36 (36%) = $4,797.22 x 12 = $57,566 annually.Since they must qualify for both ratios, the income required is $57,566.A homeowner takes a home equity loan on their personal residence. The only reason for obtaining the loan was so that they could use those funds for down payment on a commercial building. They request that the funds be directly transferred from the home equity lender to the commercial building's closing agent. Does the Truth in Lending Act apply to any portion of what the consumer is doing?A. No, because the loan involved is a loan on a commercial building.B. No, because the funds were directly transferred to the closing agent for a commercial transfer.C. Yes, because the Truth in Lending Act applies to commercial loans.D. Yes, because the home equity loan involved a residence and it was subject to the Truth in Lending Act.Yes, because the home equity loan involved a residence and it was subject to the Truth in Lending Act.

Real estate is transferred when the deed is:A. signed by

the grantor and deliveredB. communicated and acceptedC.signed and recordedD. acknowledged and delivered signed by the grantor and delivered How much interest is paid over the entire term of a $60,000, 30-year loan at 13% if it has a fixed monthly principal and interest payment of $663.72?A. $178,939B.

$114,000C. $238,949D. $113,000

$178,939The borrower will make total payments of $289,939 ($663.72 x 360). $289,939-$60,000 (the amount of principal paid) = $178,939.Which of the following statements are correct? I.Acknowledgement is an essential element of a deed II.Delivery and voluntary acceptance is an essential element of a deed III. Recordation is required to have a valid deedA.All deeds must be acknowledged in order to be validB. All deeds must be recorded in order to be validC. A deed is valid if it is accepted and deliveredD. The Parol Evidence rule allows the enforcement of oral deeds A deed is valid if it is accepted and delivered