CHAMPIONS REAL ESTATE FINANCE EXAM ACTUAL EXAM COMPLETE 180 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT ANSWER S) / ALREADY GRADED A+
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.
Character - correct answer Is a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
Capacity - correct answer Is a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
Capital - correct answer Is the sum of all assets that the borrower has accumulated.
Collateral - correct answer Is something of value that can be pledged as security for
repayment.
Yield - correct answer Is the return that the investor recieves over the life of the loan. (Also
known as profit)
Originator - correct answer The process of creating a new mortgage loan, including all steps
taken by a lender to attract and qualify a borrower.
Mortgage Broker - correct answer Typically functions as a middleman between the borrower
and the lender, negotiating, selling or arranging loans to be delivered to larger investors. At one
time originated up to 80% of all mortgage loans. (Back on the rise)
, CHAMPIONS REAL ESTATE FINANCE EXAM ACTUAL EXAM COMPLETE 180 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT ANSWER S) / ALREADY GRADED A+
Mortgage Banker - correct answer Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial banks/savings associations. (Held, or
"Warehoused")
Correspondent Lender - correct answer Usually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own funds, at their own risk.
Processing - correct answer Once application is complete the file moves into this phase.
Underwriting - correct answer The detailed process of evaluating a borrower's loan application
to determine the risk involved for the lender.
Closing - correct answer The consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan are then disbursed
by the lender.
Servicing - correct answer Includes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and managing escrow and
impound funds) remitting funds to the note holder, and following up on delinquencies.
Supply and Demand - correct answer an economic concept that states that the price of a good
rises and falls depending on how many people want it and depending on how much of the good
is available.
Funding - correct answer The process of transferring funds to a title or escrow company for
disbursement
The Safe Act - correct answer Designed to enhance consumer protection and reduce fraud.
(Key component of HERA)
M1 - correct answer Is defined as the sum of currency held by the public and transaction
deposits at depository institutions.
M2 - correct answer Is defined as M1 plus saving deposits, small-denomination time deposits
(those issued in amounts of less than $100,000) and retail money market mutual funds shares.
Fiat Money - correct answer Is currency that is not backed by any precious metals at all.
Monetary Policy - correct answer Is the maintenance of a stable money supply that provides
for growth in the economy while keeping inflation in. The federal reserves is responsible for this
policy in the United States.
Fiscal Policy - correct answer Federal Government spending. Approved by Congress. At the
treasury level, funds can be raised to pay for government spending by raising taxes and
increasing borrowing.
Federal Reserve (The Fed) - correct answer is the central bank of the United States
VERIFIED ANSWERS (100% CORRECT ANSWER S) / ALREADY GRADED A+
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.
Character - correct answer Is a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
Capacity - correct answer Is a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
Capital - correct answer Is the sum of all assets that the borrower has accumulated.
Collateral - correct answer Is something of value that can be pledged as security for
repayment.
Yield - correct answer Is the return that the investor recieves over the life of the loan. (Also
known as profit)
Originator - correct answer The process of creating a new mortgage loan, including all steps
taken by a lender to attract and qualify a borrower.
Mortgage Broker - correct answer Typically functions as a middleman between the borrower
and the lender, negotiating, selling or arranging loans to be delivered to larger investors. At one
time originated up to 80% of all mortgage loans. (Back on the rise)
, CHAMPIONS REAL ESTATE FINANCE EXAM ACTUAL EXAM COMPLETE 180 QUESTIONS WITH DETAILED
VERIFIED ANSWERS (100% CORRECT ANSWER S) / ALREADY GRADED A+
Mortgage Banker - correct answer Entities which provide their own funds for the purpose of
providing mortgage financing, as opposed to commercial banks/savings associations. (Held, or
"Warehoused")
Correspondent Lender - correct answer Usually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own funds, at their own risk.
Processing - correct answer Once application is complete the file moves into this phase.
Underwriting - correct answer The detailed process of evaluating a borrower's loan application
to determine the risk involved for the lender.
Closing - correct answer The consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan are then disbursed
by the lender.
Servicing - correct answer Includes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and managing escrow and
impound funds) remitting funds to the note holder, and following up on delinquencies.
Supply and Demand - correct answer an economic concept that states that the price of a good
rises and falls depending on how many people want it and depending on how much of the good
is available.
Funding - correct answer The process of transferring funds to a title or escrow company for
disbursement
The Safe Act - correct answer Designed to enhance consumer protection and reduce fraud.
(Key component of HERA)
M1 - correct answer Is defined as the sum of currency held by the public and transaction
deposits at depository institutions.
M2 - correct answer Is defined as M1 plus saving deposits, small-denomination time deposits
(those issued in amounts of less than $100,000) and retail money market mutual funds shares.
Fiat Money - correct answer Is currency that is not backed by any precious metals at all.
Monetary Policy - correct answer Is the maintenance of a stable money supply that provides
for growth in the economy while keeping inflation in. The federal reserves is responsible for this
policy in the United States.
Fiscal Policy - correct answer Federal Government spending. Approved by Congress. At the
treasury level, funds can be raised to pay for government spending by raising taxes and
increasing borrowing.
Federal Reserve (The Fed) - correct answer is the central bank of the United States
