TEXAS PRE-LICENSE - REAL ESTATE FINANCE UPDATED QUESTIONS AND CORRECT ANSWERS

TEXAS PRE-LICENSE - REAL ESTATE FINANCE UPDATED
QUESTIONS AND CORRECT ANSWERS

Question:
1. Which of the following is NOT an example of a depository institution?
Answer:
Insurance companies

Question:
2. What should an agent ask a new buyer client to do?
Answer:
get pre-approved for a loan

Question:
3. The process of obtaining ______________ requires that the borrower submit a mortgage application,
credit report, and supporting financial documentation.
Answer:
pre-approval

Question:
4. What is NOT a sign of recession?
Answer:
increasing real estate sales

Question:
5. The government influences the price of real estate in three ways:
1. Controlling the supply of _______
2. Lowering or raising ___________
3. Giving ___________ exemptions
Answer:
money, interest rates, and tax

Question:
6. How can local governments influence real estate market economies?
Answer:
Zoning policies can be adopted to either encourage or slow down the growth of the community.

Question:
7. Portfolio banks are:
Answer:
local banks that lends their own money and do not sell their loans on the secondary market

Question:
8. With a thorough evaluation of the buyer's credit, the lender's risk would be:

,Answer:
limited

Question:
9. Why is it important for the lender to qualify the property being financed?
Answer:
They want to be sure they can recover their investment if they foreclose on the property.

Question:
10. What is TRUE about the secondary market?
Answer:
Loans and servicing rights are sold to investors.

Question:
11. Can loan ownership be transferred?
Answer:
Yes, and the new owner must provide notice to the borrower.

Question:
12. In addition to qualifying the buyer, lenders also qualify the ______________.
Answer:
property

Question:
13. The sales comparison approach determines value by comparing the subject property to:
Answer:
the sales prices of similar properties that have been sold recently

Question:
14. To qualify a buyer for a loan, lenders consider all of the following:
Answer:
credit, income and source of down payment

Question:
15. A mortgage Insurance Premium protects:
Answer:
the lender

Question:
16. If a buyer purchased a property for $350,000 with a loan for 100% of the purchase price, which type of
loan did they most likely use?
Answer:
VA

Question:
17. With interest-only loans, borrowers pay:

,Answer:
interest only for a set time

Question:
18. If a buyer borrows money from his family to finance a property:
Answer:
the loan agreement should be in writing

Question:
19. Who is responsible for the foreclosure fees?
Answer:
the borrower

Question:
20. What does the SAFE Act require?
Answer:
All mortgage loan originators must be licensed in accordance with national standards.

Question:
21. The four major phases of the real estate market cycle are:
Answer:
recovery, expansion, hyper supply, and recession.

Question:
22. Construction for new homes and commercial buildings starts during the
Answer:
expansion phases

Question:
23. What is TRUE of recession?
Answer:
The unemployment rate rises.

Question:
24. A decrease in the dollar's purchasing power is called
Answer:
inflation

Question:
25. The amount of a foreign currency a dollar can buy is called the:
Answer:
exchange rate

Question:
26. Falling unemployment causes:

, Answer:
economic growth

Question:
27. Which of the following is true about property tax exemptions?
Answer:
They decrease the value the owner will be taxed on.

Question:
28. Texas offers property tax exemptions for all of the following EXCEPT:
Answer:
property owned by low income families

Question:
29. Which one of the following definitions best describes a tax credit?
Answer:
a dollar-for-dollar reduction in a taxpayer's tax liabilities

Question:
30. What is TRUE of a buyer's market?
Answer:
Sales prices are more negotiable for buyers.

Question:
31. Increases in the cost of financing, cost of construction, and land values can cause the price of real estate
to:
Answer:
increase

Question:
32. Which of the following would motivate builders to build new houses right away?
Answer:
low prices of raw land

Question:
33. The price of real estate is affected by:
Answer:
demand for property, supply of money, and unemployment

Question:
34. If 12 properties have been sold in the last 3 months in an area, and there are 20 houses for sale now,
there is a supply of housing for
Answer:
5 months

Question:
35. What is NOT a business incentive in Texas?