REE 3043 Paul Black - FIU Exam 4 TEST STUDY GUIDE 2025/2026
ACCURATE QUESTIONS AND VERIFIED CORRECT SOLUTIONS WITH
RATIONALES
|| 100% GUARANTEED PASS
<RECENT VERSION>
REE 3043 Paul Black - FIU Exam 4: Comprehensive Study Guide
Module 1: Real Estate Finance & Mortgages
1. What is the primary function of a mortgage in a real estate transaction?
A) To transfer property title
B) To serve as a promissory note
C) To use the property as collateral for a loan
D) To establish the purchase price
2. A loan that is not backed by any government agency is known as a:
A) FHA loan
B) VA loan
C) Conventional loan
D) Seller-financed loan
,3. The clause in a mortgage that allows the lender to declare the entire loan
balance due if the property is sold is the:
A) Acceleration clause
B) Alienation clause (Due-on-Sale clause)
C) Defeasance clause
D) Prepayment clause
4. What does LTV stand for in real estate finance?
A) Loan-to-Value
B) Liability-to-Venture
C) Lien-to-Value
D) Long-term Valuation
5. If a borrower has a loan with a 80% LTV ratio on a $300,000 home, what is
their down payment?
A) $60,000
B) $240,000
C) $80,000
D) $40,000
Rationale: 80% LTV means the loan is $240,000. The down payment is the
remaining 20%, which is $60,000.
,6. The document that pledges the property as collateral for the debt without
transferring title is a:
A) Deed
B) Mortgage
C) Promissory Note
D) Land Contract
7. A promissory note is:
A) The security instrument for the loan
B) The borrower's personal promise to repay the debt
C) The same as a mortgage
D) Proof of property ownership
8. "PITI" in a monthly mortgage payment includes all of the following
EXCEPT:
A) Principal
B) Interest
C) Taxes
D) Insurance
E) Homeowners Association (HOA) fees
, 9. A borrower who makes a down payment of less than 20% will typically be
required to pay:
A) Discount points
B) Property taxes
C) Private Mortgage Insurance (PMI)
D) A higher interest rate
10. The right of a borrower to recover title after satisfying a debt is the right
of:
A) Redemption
B) Rescission
C) Foreclosure
D) Assignment
Module 2: Types of Loans & Financing
11. An FHA loan is primarily characterized by:
A) Being only for veterans
B) Its low down payment requirements
C) Having the highest interest rates
D) Not being insured by the government
ACCURATE QUESTIONS AND VERIFIED CORRECT SOLUTIONS WITH
RATIONALES
|| 100% GUARANTEED PASS
<RECENT VERSION>
REE 3043 Paul Black - FIU Exam 4: Comprehensive Study Guide
Module 1: Real Estate Finance & Mortgages
1. What is the primary function of a mortgage in a real estate transaction?
A) To transfer property title
B) To serve as a promissory note
C) To use the property as collateral for a loan
D) To establish the purchase price
2. A loan that is not backed by any government agency is known as a:
A) FHA loan
B) VA loan
C) Conventional loan
D) Seller-financed loan
,3. The clause in a mortgage that allows the lender to declare the entire loan
balance due if the property is sold is the:
A) Acceleration clause
B) Alienation clause (Due-on-Sale clause)
C) Defeasance clause
D) Prepayment clause
4. What does LTV stand for in real estate finance?
A) Loan-to-Value
B) Liability-to-Venture
C) Lien-to-Value
D) Long-term Valuation
5. If a borrower has a loan with a 80% LTV ratio on a $300,000 home, what is
their down payment?
A) $60,000
B) $240,000
C) $80,000
D) $40,000
Rationale: 80% LTV means the loan is $240,000. The down payment is the
remaining 20%, which is $60,000.
,6. The document that pledges the property as collateral for the debt without
transferring title is a:
A) Deed
B) Mortgage
C) Promissory Note
D) Land Contract
7. A promissory note is:
A) The security instrument for the loan
B) The borrower's personal promise to repay the debt
C) The same as a mortgage
D) Proof of property ownership
8. "PITI" in a monthly mortgage payment includes all of the following
EXCEPT:
A) Principal
B) Interest
C) Taxes
D) Insurance
E) Homeowners Association (HOA) fees
, 9. A borrower who makes a down payment of less than 20% will typically be
required to pay:
A) Discount points
B) Property taxes
C) Private Mortgage Insurance (PMI)
D) A higher interest rate
10. The right of a borrower to recover title after satisfying a debt is the right
of:
A) Redemption
B) Rescission
C) Foreclosure
D) Assignment
Module 2: Types of Loans & Financing
11. An FHA loan is primarily characterized by:
A) Being only for veterans
B) Its low down payment requirements
C) Having the highest interest rates
D) Not being insured by the government
