Champions Real Estate Finance Exam with complete solutions

Loan-to-Value Ratio (LTV) - correct answer-The percentage of the lesser of the appraised value or sales price that the lender will lend. ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to 80% of the sales price or appraised value, whichever is lower. Package Mortgage - correct answer-Includes both real and personal property ( fixtures and furnishings) Blanket Mortgage - correct answer-Covers more than one piece of property. Wraparound Mortgage - correct answer-Method of financing which preserves the low, existing interest rate on the original note. Open-End Mortgage - correct answer-Permits additional borrowing on the same note. This is sometimes called a credit card mortgage or a home equity line of credit - HELOC. Budget Mortgage - correct answer-The monthly house payment includes principal, interest, taxes and insurance (known as PITI) Collateral -Dependent Loans - correct answer-A hard money loan is a specific type of asset-based financing in which a borrower receives funds secured by the value of a parcel of real estate.