Real Estate

Q: The relationship between the amount of money a lender is willing to loan and192 the lender's estimate of _________________________ of the property that will serve as security is called the loan-to-value ratio.

Q: A(n) ____________________ loan is any loan that has a final payment that is larger than any of the previous payments on the loan.

Q: A mortgage in which the lender collects additional money to pay hazard insurance and property taxes on the mortgaged property is called a(n) ____________________ mortgage.

Q: A loan that requires only interest payments until the last day of its life, at which time the full amount borrowed is due, is called a(n) ____________________ loan.

Q: Since the VA is guaranteeing the loan, a VA loan typically requires a large down payment.

Q: A certificate of reasonable value is issued by a VA staff appraiser.

Q: Loan discount points shorten the repayment time of the loan.

Q: Using the rule of thumb, which states that each discount point raises the yield by 1/8 of 1%, two discount points raise the effective yield of a typical home loan by1/4 of 1%.

Q: A home sells for $150,000 but is appraised by a lender for $145,000. The lender will typically apply the loan-to-value ratio to the larger of the two numbers.

Q: A certificate of reasonable value is issued by a HUD appraiser.

Q: In the event of default and subsequent foreclosure, a VA borrower is responsible for making good any losses suffered.

Q: A conventional mortgage is neither insured nor guaranteed by the government.

Q: Usually, the borrower of a FHA loan is also responsible for the mortgage insurance premium.

Q: A single woman applied for an FHA loan to buy a property she intends to use as a rental. Her application will probably be denied.

Q: Under section 203(b), the FHA lends to the secondary market.

Q: The role of the FHA in residential mortgage lending is loaning the money.

Q: Loan points increase the yield to the lender.

Q: The buyer normally pays the discount points when a conventional loan is taken out to purchase a residence.

Q: The homeowner has made regular mortgage payments over ten years and the housing values in the neighborhood have steadily risen. The equity has steadily increased.

Q: A mortgage lender will lend based on a proportion of the appraisal or sale price, whichever is less. This is called the loan-to-value ratio.

Q: In order to ensure that the mortgagor has enough money to pay yearly property taxes and hazard insurance, the lender may insist on a budget mortgage.

Q: Money for tax and insurance payments that accompanies principal and interest could be placed in an escrow account or trust account.

Q: A mortgage, which is repaid in regularly scheduled equal installments, is called a balloon mortgage.

Q: Interest paid on a real estate mortgage loan is normally paid annually and in advance.

Q: For a veteran to obtain a VA loan, it is necessary to have a a. certificate of optimal value. b. certificate of eligibility. c. history of property ownership. d. certificate of deferment.

Q: In the event of default and subsequent foreclosure, which borrower is responsible for making good any losses suffered? a. FHA b. VA c. HUD d. 90% conventional

Q: Which government loan program will make direct loans if a qualified borrower cannot find a lender? a. FHA b. VA c. CRV d. HUD

Q: On a $64,000 home, which of the following would require the largest cash down payment? a. FHA-insured loan b. 80% loan-to-value conventional loan c. 90% loan-to-value conventional d. 100% DVA loan

Q: Usually, the borrower of a FHA loan is also responsible for the a. mortgage insurance premium. b. funding fees. c. private mortgage insurance. d. estoppel certificate.

Q: A single woman applied for a FHA loan to buy a property she intends to use as a rental. Which if anything might cause her application to be denied? a. There is no basis for denial for the application b. She is single c. She is a woman d. She plans to use the property as a rental

Q: A borrower can expect to pay a mortgage insurance premium for a. an FHA insured loan. b. an 80% conventional loan. c. a graduated payment loan. d. an accelerated payment loan.

Q: Under section 203(b), the FHA a. insures lenders against loan default. b. lends to the secondary market. c. guarantees loans. d. makes loans directly.

Q: Who must pay the discount points on a FHA loan? a. Anyone who agrees to b. Seller c. Buyer d. There are no points on a FHA loan

Q: The role of the FHA in residential mortgage lending is a. guaranteeing the loan. b. insuring the loan. c. loaning the money. d. as a secondary lender.

Q: Discount points are more likely to be used during periods of a. tight money. b. available money. c. cash sales. d. seller financed sales.

Q: If a borrower paid $3,550 in points on a loan of $95,000 how many points were charged? a. .003 points b. .3 points c. 3 points d. 3.7 points

Q: The buyer agrees to pay $90,000 for a home, contingent upon obtaining an 80% loan. The lender charges $3,600 for points. How many points were charged?a. 2 pointsb. 4 pointsc. 5 pointsd. 6 points

Q: Who normally pays the discount points when a conventional loan is taken out to purchase a residence? a. Broker b. Seller c. Lender d. Buyer

Q: Using the rule of thumb used by lenders (each point charged raises the yield by 1/8 of 1%), 4 discount points raise the effective yield of a typical home loan bya. 1/32 of 1%.b. 2/8 of 1%.c. 1/4of 1%.d. 1/2 of 1%.

Q: The expenses, which a lender incurs while processing a mortgage loan application, are recovered from the borrower as a. discount points. b. origination fees. c. mortgage insurance premium. d. private mortgage insurance.

Q: The homeowner has made regular mortgage payments over ten years and the housing values in the neighborhood have steadily risen. The equity has a. stayed the same. b. steadily declined. c. steadily increased. d. fluctuated and now is less than it was when the house was purchased.

Q: The value of the property above the total liens or mortgages is called a. the equity. b. due on sale. c. the assessment. d. the loan-to-value ratio.

Q: A mortgage lender will lend based on a proportion of the appraisal or sale price, whichever is less. This is called the a. loan-to-value ratio. b. owner's equity. c. percent return. d. CRV.

Q: A loan progress chart is used in connection with a. partially amortized loans. b. term loans. c. index loans. d. straight loans.

Q: A final loan payment that is larger than previous payments is called a a. balloon payment. b. budget payment. c. terminal payment. d. graduated payment.

Q: Money for tax and insurance payments that accompanies principal and interest could be placed in any of the following accounts EXCEPT a. a trust account. b. an escrow account. c. a remaining balance account. d. a reserve account.

Q: A purchaser took out a $50,000 new discount mortgage when he bought his home. The lender charged 2 discount points. On which amount will the mortgagor be paying interest the first month?a. $49,000b. $50,000c. $51,000d. $56,000

Q: A home buyer wants to borrow $100,000. The lender quotes a loan origination fee of one point and a loan discount of one point. What size loan must be obtained to pay the two points and still leave $100,000? a. $96,000 b. $98,039 c. $102,000 d. $102,041

Q: A borrower signs a loan agreement for $50,000. Out of this, the lender charges a $500.00 loan origination fee and two discount points. How much cash does the borrower get? a. $46,600 b. $47,000 c. $48,500 d. $49,000

Q: A house sells for $102,000 and is appraised at $100,000 by a lender who is willing to make a 75% loan-to-value loan. How much down payment will this house require?a. $25,500b. $27,000c. $75,000d. $76,500

Q: If a monthly principal and interest payment for a 30-year, 12% loan of $1,000 would be $10.29 what would the monthly payment be for a home purchased at $75,500 with an 80% loan on those terms?a. $10.29b. $621.52c. $755.90d. $776.90

Q: What is the annual interest on $50,000 calculated at a rate of 8.125% per annum?a. $331.00b. $406.25c. $3,310.00d. $4,062.50

Q: As payments are made, the amount of interest taken from a mortgage loan payment decreases and the amount applied to the principal increases. This is because of a. appreciation. b. variable interest rate. c. amortization. d. depreciation.

Q: The type of loan whereby the borrower makes interest only payments during the life of the loan with the entire principal due for the final payment is called a. a discounted loan. b. an amortized loan. c. a term loan. d. a partially amortized loan.

Q: After the expenses of the sale are paid in a foreclosure sale, the ____________________ is paid.

Q: If the borrower defaults, the trustee has the right to sell the property and convey ownership to the purchaser with a ______________________________.

Q: The right to collect rents in the event of default is called a(n) ____________________ of ____________________ clause.

Q: Under the ____________________ of ____________________ clause, if the borrower defaults, the trustee has the right to sell the property and convey ownership to the purchaser.

Q: When the debt is paid off the lender sends to the trustee the note, the deed of trust and a request for ____________________.

Q: The title that the borrower grants to the trustee is sometimes called ____________________ or ____________________ title.

Q: The trustee in a deed of trust is a neutral ____________________ party.

Q: Under a deed of trust, the lender is known as the ____________________.

Q: Under a deed of trust the borrower is known as the ____________________.

Q: The basic purpose of the deed of trust, also referred to as a trust deed, is the same as a ____________________.

Q: The title that the borrower grants to the trustee is referred to as "naked title".

Q: The basic purpose of the deed of trust is the same as a mortgage.

Q: In a deed of trust, if the borrower defaults, the lender can take possession of the property and collect the rents.

Q: In the automatic form of trusteeship, the trustee is named in the deed of trust but is not personally notified of the appointment.

Q: Proceeds from a foreclosure sale go first to the lender, then to the borrower and then to the expenses of the sale.

Q: The presence of a power of sale right prohibits the trustee from using a court-ordered foreclosure.

Q: One major advantage of a deed of trust over a mortgage is the time between default and foreclosure is relatively short.

Q: Mortgages are the same as trust deeds in that foreclosure is the cure for default.

Q: If an owner pays the full amount of the debt just before his property is sold at auction, he is probably exercising his right of redemption.

Q: Regarding the non-judicial foreclosure of a deed of trust, the property is sold at auction.

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