Real Estate Final Sections 11-15 Flashcards

Real Estate Final Sections 11-15 Flashcards The purchase price is shown on the closing statement asA credit to the seller and a debit to the buyer Borrower Kathy has a starting balance of $150,000 at the beginning of January. She is being charged at 3.25% interest. Her total monthly payment for combined principal and interest is $640.50. How much of the first payment is the principal?1) $640.502) $844.643) $406.254) $234.25 4) $234.25$150,000 x .0325 = $4875/ 12 = $406.25 paid toward interest; $640.50 - $406.25 = $234.25 paid toward principal A contract for deed is also called a Land ContractTrue You own a home that has a market value of $250,000. You also have a mortgage on the property with a balance due of $55,000. How much equity do you have in the home?

$195,000$250,000 - 55,000 = 195,000

The acceleration clause calls the entire balance of the loan due if the borrower defaults on the loan.True Straw buyers are people who consent to the use of their names and personal details by companies or people who will obtain mortgage loans but do not intend to live in the homes. This is considered mortgage fraud and is illegal.True Meeting of the minds is when two parties reach an agreement through mutual assent.True Options are an agreement between a property owner and a buyer that gives the buyer the right to purchase a contract without the obligation to actually do so.True Randall bought a property for $105,000. He sold it for

$150,000. Calculate his percentage of profit:

43%Profit (Amount made on sale) ÷ Total cost = Percent Profit: $150,000 price - $105,000 cost = $45,000 profit: $45,000 profit / $105,000 cost = .428 or 43% profit Highest and best use is fundamentally determined by alternate types of potential users bidding for a site in accordance with the locational and environmental value of the sit in each use.True 400 Units are rented out of 450 total units. What is the occupancy rate?89%400 occupied (vacant) units / 450 total units= .8888888889 or 89% The broker commission is usually paid by the seller or whoever employed the broker unless otherwise negotiated beforehand on the contract.True Which mortgage provision makes a loan not assumable?1) A habendum clause2) A defeasance clause3) Due-on-sale clause4) An assumption clause 3) Due-on-sale clause Which statement is true regarding FHA loans?1) The interest rate charged is set by the government2) The interest rate charged is negotiable as part of the free flowing market3) The interest rate charged is not part of the open money market4) Buyers cannot negotiate the interest

rate for FHA loans.2) The interest rate charged is negotiable as part of the free flowing market Which statement is false regarding the Government National Mortgage Market Association (GNMA)1) GNMA is part of the primary mortgage market2) GNMA is a wholly

owned government corporation under HUD.3) The Mortgage-backed securities program provided by GNMA are Pass-Through Securities as GNMA acting as a GUARANTOR of these securities rather than the actual purchaser or creator of the securities.4) GNMA provides the full faith and credit guarantee of the U.S. Government.1) GNMA is part of the primary mortgage market A conventional loan is a mortgage loan that is not guaranteed or insured by the government.True

Disintermediation is the normal flow of money into financial institutions from the public in the form of deposits.False, Intermediation is the normal flow of money into financial institutions from the public in the form of deposits.Disintermediation occurs when depositors take their money out of financial institutions because they can earn more money in other investments.Interest on an assumable mortgage is paid ahead, so seller gets a credit from the buyer at closing.False, Interest on an assumable mortgage is paid in arrears, so seller owes the buyer a credit at closing

• Discount point on a $100,000 mortgage would cost

$2,500

False, Each Discount Point costs 1% of the purchase price per discount point. $100,000 x .01 = $1,000 A buyer purchased a rental property that is closing on October 20th. The seller has already collected rent for the month of October in the amount of $2,000.00. The buyer gets the day of closing. How is this handled on the closing statement $774.19 credit to the buyer and debit to the seller$2,000/31 = $64.5161290323 x 12 buyer days (days including closing date left in the month belonging to the buyer = $774.19 Hypothecation pledges the property as collateral. False, The Mortgage pledges the property as collateral.Hypothecation is the pledging of securities or other assets as collateral to secure a loan while not giving up possession of the property.Which of the following statements are false regarding The Real Estate Settlement Procedures Act (RESPA)?1) Giving a kickback in exchange for referring a settlement service business to another person is prohibited.2) Kickbacks are said to harm consumers by driving down the cost of transactions.3) Mortgage brokers can only pay other mortgage brokers a referral fee.4) Real Estate Licensees can only pay other real estate licensees a referral fee.2) Kickbacks are said to harm consumers by driving down the cost of transactions.You have a listing with a 7% commission. Your sellers have accepted an offer from a buyer that has their own agent.You have agreed to give the buyers agent 3.5% of the commission. Your agreement with your broker is that you get 55% of the commission you earn. The sales price was $350,500.00. How much will you get paid?$6,747.13$350,500 X .03.5 (7%-3.5%) = $12,267.50 x .55

= $6,747.13

Kindle had a written contract with Frank. Frank failed to perform. How long does Kindle have to sue Frank per the Statue of Limitations?

• Years

Remedies for breach of contract include all of the following except1) Execution2) Liquidated Damages3) Rescission4) Compensatory Damages 1) Execution A debit means that the person who gets the debit is being charged money.True Which of the following statements is FALSE regarding The Residential Lead-based Paint Hazard Reduction Act?1) A lead based paint disclosure must be made for residential property sold or rented that were built prior to 19782) Buyers and renters must be given an EPA booklet before