REAL ESTATE FINAL EXAM (150
QUESTIONS) COMPLETE ANSWERS
If a single parent is applying for a real estate loan, when would the fact have to be
revealed that part of the parent's income is from child support? - ANSWER-If the
parent was relying on the income for repayment of the loan
When the lender under a deed of trust requires title insurance, who would be the
most likely person to pay for it? - ANSWER-The trustor
Trustor is another name for? - ANSWER-Borrower
The Pickets are purchasing a home for $780,000 and the lender is giving them a
90% loan at 5% interest, plus a 2% loan origination fee. How much is the loan
origination fee? - ANSWER-$14,040
Discrimination is prohibited in lending practices under - ANSWER-ECOA
A buyer assumes the mortgage. How is the owner relieved of the liability? -
ANSWER-Novation
Which type of loan will result in the largest reduction of the principal balance most
quickly? - ANSWER-6% over 15 years
Who is the largest purchaser in the secondary market? - ANSWER-Fannie Mae
What does Fannie Mae stand for? - ANSWER-Federal National Mortgage
Association
Which transaction requires a securities license? - ANSWER-Selling shares in Fannie
Mae
Who is NOT an originator of primary loans? - ANSWER-FHA
A buyer wanted to use a promissory note for consideration on the purchase of a
property. Can he do this? - ANSWER-Yes. This is acceptable as long as the seller
agrees.
If advertised alone, which would be in violation of Truth in Lending? - ANSWER-"No
down payment required."
Why would a mortgagee have an appraisal on the property? - ANSWER-To assure
the property value is sufficient to cover the loan
Seller Jolita lists her house with Broker Fred. Fred then buys Jolita's house and
collects the agreed-upon commission. This is an example of - ANSWER-self-dealing.
, An owner was selling his own home. Can he advertise the down payment? -
ANSWER-Yes, because it was his own home.
Which is true about restrictive covenants? - ANSWER-They are placed by private
parties in a deed.
Looking at shopping centers in the appraisal process, the social fiber of the
community and distances from schools is called - ANSWER-neighborhood analysis.
Which best describes why a buyer purchases a home using the market data
approach? - ANSWER-Buyers buy after they compare the house with others.
How many feet in one yard? - ANSWER-3 feet in one yard
A scale drawing shows a room to be 3 inches by 4-1/2 inches. Carpet, which is $15
per square yard, is to be installed in the room. If the scale is 1 inch to 4 feet, how
much would it cost to install the carpet? - ANSWER-$360
A tenant leased 3,000 square feet at $10 per square foot and 8% of gross income.
The total annual rent she paid was $60,000. What was the gross income on which
she paid percentage rent? - ANSWER-$375,000
The Rose family owns a home in a semi-rural area, which is about five years old.
Recently announced plans for a new regional airport will place their home directly in
line with a main runway ending 1 mile before their home. If the airport is constructed,
will this diminish the value of the Rose Home? - ANSWER-Yes, because of
economic obsolescence.
On a $500,000 loan the borrower is required to pay two points. How much does the
borrower have to pay the lender? - ANSWER-$510,000.00
The discount points charged by a lender on a federal VA or FHA loan are a
percentage of the - ANSWER-loan amount.
An increase in the availability of money would lead to which effect? - ANSWER-
Interest rates would go down.
When the amortized payment of a mortgage remains constant over the period of the
loan but leaves an outstanding balance to be paid at the end, this payment is called -
ANSWER-a balloon payment.
In an installment land contract, what type of title did the seller retain? - ANSWER-
Legal
Which of the following is true of a second mortgage? - ANSWER-It is usually issued
at a higher rate of interest.
Usury MOST nearly means - ANSWER-illegal interest.
QUESTIONS) COMPLETE ANSWERS
If a single parent is applying for a real estate loan, when would the fact have to be
revealed that part of the parent's income is from child support? - ANSWER-If the
parent was relying on the income for repayment of the loan
When the lender under a deed of trust requires title insurance, who would be the
most likely person to pay for it? - ANSWER-The trustor
Trustor is another name for? - ANSWER-Borrower
The Pickets are purchasing a home for $780,000 and the lender is giving them a
90% loan at 5% interest, plus a 2% loan origination fee. How much is the loan
origination fee? - ANSWER-$14,040
Discrimination is prohibited in lending practices under - ANSWER-ECOA
A buyer assumes the mortgage. How is the owner relieved of the liability? -
ANSWER-Novation
Which type of loan will result in the largest reduction of the principal balance most
quickly? - ANSWER-6% over 15 years
Who is the largest purchaser in the secondary market? - ANSWER-Fannie Mae
What does Fannie Mae stand for? - ANSWER-Federal National Mortgage
Association
Which transaction requires a securities license? - ANSWER-Selling shares in Fannie
Mae
Who is NOT an originator of primary loans? - ANSWER-FHA
A buyer wanted to use a promissory note for consideration on the purchase of a
property. Can he do this? - ANSWER-Yes. This is acceptable as long as the seller
agrees.
If advertised alone, which would be in violation of Truth in Lending? - ANSWER-"No
down payment required."
Why would a mortgagee have an appraisal on the property? - ANSWER-To assure
the property value is sufficient to cover the loan
Seller Jolita lists her house with Broker Fred. Fred then buys Jolita's house and
collects the agreed-upon commission. This is an example of - ANSWER-self-dealing.
, An owner was selling his own home. Can he advertise the down payment? -
ANSWER-Yes, because it was his own home.
Which is true about restrictive covenants? - ANSWER-They are placed by private
parties in a deed.
Looking at shopping centers in the appraisal process, the social fiber of the
community and distances from schools is called - ANSWER-neighborhood analysis.
Which best describes why a buyer purchases a home using the market data
approach? - ANSWER-Buyers buy after they compare the house with others.
How many feet in one yard? - ANSWER-3 feet in one yard
A scale drawing shows a room to be 3 inches by 4-1/2 inches. Carpet, which is $15
per square yard, is to be installed in the room. If the scale is 1 inch to 4 feet, how
much would it cost to install the carpet? - ANSWER-$360
A tenant leased 3,000 square feet at $10 per square foot and 8% of gross income.
The total annual rent she paid was $60,000. What was the gross income on which
she paid percentage rent? - ANSWER-$375,000
The Rose family owns a home in a semi-rural area, which is about five years old.
Recently announced plans for a new regional airport will place their home directly in
line with a main runway ending 1 mile before their home. If the airport is constructed,
will this diminish the value of the Rose Home? - ANSWER-Yes, because of
economic obsolescence.
On a $500,000 loan the borrower is required to pay two points. How much does the
borrower have to pay the lender? - ANSWER-$510,000.00
The discount points charged by a lender on a federal VA or FHA loan are a
percentage of the - ANSWER-loan amount.
An increase in the availability of money would lead to which effect? - ANSWER-
Interest rates would go down.
When the amortized payment of a mortgage remains constant over the period of the
loan but leaves an outstanding balance to be paid at the end, this payment is called -
ANSWER-a balloon payment.
In an installment land contract, what type of title did the seller retain? - ANSWER-
Legal
Which of the following is true of a second mortgage? - ANSWER-It is usually issued
at a higher rate of interest.
Usury MOST nearly means - ANSWER-illegal interest.
