PRINCIPLES OF REAL ESTATE II
2026/2027 | COMPREHENSIVE
PRACTICE QUESTIONS & ANSWERS |
STUDY GUIDE
Profit: - correct answer-A financial gain. Making more money selling a product
than was spent buying or producing the product.
Loss: - correct answer-A financial loss — Making less money selling a product than
was spent buying or producing the product.
Interest: - correct answer-Money repaid regularly at a specified rate as
compensation for money lent.
Principal: - correct answer-The amount lent to a borrower to purchase a house —
the borrower pays the lender interest in exchange for the principal.
Mortgage: - correct answer-A mortgage is a secured loan that is tied to real
estate, where the borrower has to pay the money back to the lender on a set
schedule and amount of payments. Mortgages are also considered "liens against
property" or "claims on property."
,The borrower pays the lender interest in exchange for the: - correct answer-
principal
Down Payment: - correct answer-The initial payment made when buying
something on credit; a down payment is paid directly by the buyer to the seller.
The standard down payment is 20% of the overall house price, and while a 20%
down payment is recommended, it is not required. The minimum down payment
required by mortgage lenders is 3% of the house's price.
Amortization: - correct answer-The repayment of a loan over time in equal
installments that include principal and interest.
With an amortizing loan, mortgage payments are: - correct answer-equal
installments that go towards principal and interest
For the licensing exam, your calculator MUST: - correct answer-Be able to do
basic arithmetic
To turn a fraction into a decimal, you divide the denominator by the numerator. -
correct answer-FALSE
(Explanation: Whenever you need to transform a fraction into a decimal, divide
the numerator (top number) by the denominator (bottom number)
When converting a double-digit percentage into a decimal, you'll start: - correct
answer-farthest to the right and move the decimal to the left twice
The decimal equivalent of 345% is ____. - correct answer-3.45
,Part: - correct answer-A portion of the total amount, the numerator (3 of 3⁄4)
Percentage: - correct answer-A rate or amount in each hundred (3⁄4 is 75%
written as a fraction)
Total: - correct answer-The "final" or "end result" number, the denominator (4 of
3⁄4)
To solve for the total, which formula should you use? - correct answer-Total =
part / percentage
To solve for the part, you need to multiply the total by the percentage. - correct
answer-TRUE
When solving for percentage, you'll need to ______. - correct answer-divide the
part by the total
A listing broker made 3% commission on a $475,000 sale, How much did the
listing broker make in commission? - correct answer-$14,250
What is the sum of money a homeowner is approved for called? - correct answer-
the principal
How do you find the monthly interest rate? - correct answer-by dividing the
annual interest rate by 12
, Eden puts an offer in on a three-story Victorian home in Hudson. She puts earnest
money into an escrow account but the deal falls through - it turns out the house
was infested with termites and didn't pass inspection. Eden is worried she won't
receive her earnest money. Her agent tells her that: - correct answer-Her earnest
money will be returned to her; her contract specifies that she will receive this
money if a property doesn't pass inspection.
What happens to the earnest money on closing day? - correct answer-It is
transferred to the seller.
If a buyer makes a 20% down payment and obtains a $100,000 mortgage, what is
the sales price of the property? - correct answer-$125,000
Shawn is buying a house. He put 20% down as a down payment and obtained a
$150,000 mortgage from a lender. What is the total sales price of Shawn's
purchase? - correct answer-$187,500
TRUE or FALSE: Amortization is the inflated repayment of a loan upon its due
date. - correct answer-FALSE
(Explanation: Amortization is the repayment of a loan principal over time.)
Origination Points: - correct answer-Fees charged to compensate loan officers for
underwriting and administering the loan
Discount Points - - correct answer-Fees charged in exchange for a lower interest
rate on the loan
2026/2027 | COMPREHENSIVE
PRACTICE QUESTIONS & ANSWERS |
STUDY GUIDE
Profit: - correct answer-A financial gain. Making more money selling a product
than was spent buying or producing the product.
Loss: - correct answer-A financial loss — Making less money selling a product than
was spent buying or producing the product.
Interest: - correct answer-Money repaid regularly at a specified rate as
compensation for money lent.
Principal: - correct answer-The amount lent to a borrower to purchase a house —
the borrower pays the lender interest in exchange for the principal.
Mortgage: - correct answer-A mortgage is a secured loan that is tied to real
estate, where the borrower has to pay the money back to the lender on a set
schedule and amount of payments. Mortgages are also considered "liens against
property" or "claims on property."
,The borrower pays the lender interest in exchange for the: - correct answer-
principal
Down Payment: - correct answer-The initial payment made when buying
something on credit; a down payment is paid directly by the buyer to the seller.
The standard down payment is 20% of the overall house price, and while a 20%
down payment is recommended, it is not required. The minimum down payment
required by mortgage lenders is 3% of the house's price.
Amortization: - correct answer-The repayment of a loan over time in equal
installments that include principal and interest.
With an amortizing loan, mortgage payments are: - correct answer-equal
installments that go towards principal and interest
For the licensing exam, your calculator MUST: - correct answer-Be able to do
basic arithmetic
To turn a fraction into a decimal, you divide the denominator by the numerator. -
correct answer-FALSE
(Explanation: Whenever you need to transform a fraction into a decimal, divide
the numerator (top number) by the denominator (bottom number)
When converting a double-digit percentage into a decimal, you'll start: - correct
answer-farthest to the right and move the decimal to the left twice
The decimal equivalent of 345% is ____. - correct answer-3.45
,Part: - correct answer-A portion of the total amount, the numerator (3 of 3⁄4)
Percentage: - correct answer-A rate or amount in each hundred (3⁄4 is 75%
written as a fraction)
Total: - correct answer-The "final" or "end result" number, the denominator (4 of
3⁄4)
To solve for the total, which formula should you use? - correct answer-Total =
part / percentage
To solve for the part, you need to multiply the total by the percentage. - correct
answer-TRUE
When solving for percentage, you'll need to ______. - correct answer-divide the
part by the total
A listing broker made 3% commission on a $475,000 sale, How much did the
listing broker make in commission? - correct answer-$14,250
What is the sum of money a homeowner is approved for called? - correct answer-
the principal
How do you find the monthly interest rate? - correct answer-by dividing the
annual interest rate by 12
, Eden puts an offer in on a three-story Victorian home in Hudson. She puts earnest
money into an escrow account but the deal falls through - it turns out the house
was infested with termites and didn't pass inspection. Eden is worried she won't
receive her earnest money. Her agent tells her that: - correct answer-Her earnest
money will be returned to her; her contract specifies that she will receive this
money if a property doesn't pass inspection.
What happens to the earnest money on closing day? - correct answer-It is
transferred to the seller.
If a buyer makes a 20% down payment and obtains a $100,000 mortgage, what is
the sales price of the property? - correct answer-$125,000
Shawn is buying a house. He put 20% down as a down payment and obtained a
$150,000 mortgage from a lender. What is the total sales price of Shawn's
purchase? - correct answer-$187,500
TRUE or FALSE: Amortization is the inflated repayment of a loan upon its due
date. - correct answer-FALSE
(Explanation: Amortization is the repayment of a loan principal over time.)
Origination Points: - correct answer-Fees charged to compensate loan officers for
underwriting and administering the loan
Discount Points - - correct answer-Fees charged in exchange for a lower interest
rate on the loan
