Champions Real Estate Finance Practice Exam Questions with
Verified Answers 2026/2027 New Update
___________ financing implies that the debt ranks behind the first secured lender.
Subordinate
Junior
Secondary
Private - answer -Subordinate
A provision in a mortgage contract that allows the seller of a home to pass responsibility to the
buyer of the home for the existing mortgage.
Alienation Clause
Due-on-sale Clause
Subordination Clause
Assumption Clause - answer -Assumption Clause
This clause insures that the borrower shall not "sell, transfer, encumber, assign, convey or in any
manner dispose of the collateralized property or any part there of without the expressed
written consent from the lender.
Subordination clause
Due-on-sale clause
Alienation clause
1|Page
,Assumption clause - answer -Due-on-sale clause
Sales price $175,000. LTV is 85%. Interest rate is 4.75%. Term is 30 years. Closing date is August
20th. Using a calender year, calculate the amount of interest paid the first full month
$501.03
$232.29
$588.80
$692.71 - answer -$588.80
The borrower agrees with the lender for a certain amount of money to build the improvements.
What kind of mortgage does he have?
Blanket mortgage
Package mortgage
Construction mortgage
New home mortgage - answer -Construction mortgage
The lender and borrower agree to adjust the interest rate periodically to a new interest rate
based on a predetermined index in the economy. This is a ____________ mortgage.
Variable mortgage
Adjustable rate mortgage
Floating mortgage
Does not exist - answer -Adjustable rate mortgage
2|Page
, Mortgage insurance is typically required when the LTV is greater than ___________%.
75%
80%
85%
90% - answer -80%
Lending institutions often change interest on ______________ at a rate that is higher than a
conventional mortgage in order to compensate for carrying more risk.
Predatory mortgages
FICO mortgages
Participation mortgages
Subprime mortgages
Next question - answer -Subprime mortgages
Which of the following is not allowed under FHA loans?
Vacation home
Condominium
Manufactured home
Buy land and build a home - answer -Vacation home
3|Page
Verified Answers 2026/2027 New Update
___________ financing implies that the debt ranks behind the first secured lender.
Subordinate
Junior
Secondary
Private - answer -Subordinate
A provision in a mortgage contract that allows the seller of a home to pass responsibility to the
buyer of the home for the existing mortgage.
Alienation Clause
Due-on-sale Clause
Subordination Clause
Assumption Clause - answer -Assumption Clause
This clause insures that the borrower shall not "sell, transfer, encumber, assign, convey or in any
manner dispose of the collateralized property or any part there of without the expressed
written consent from the lender.
Subordination clause
Due-on-sale clause
Alienation clause
1|Page
,Assumption clause - answer -Due-on-sale clause
Sales price $175,000. LTV is 85%. Interest rate is 4.75%. Term is 30 years. Closing date is August
20th. Using a calender year, calculate the amount of interest paid the first full month
$501.03
$232.29
$588.80
$692.71 - answer -$588.80
The borrower agrees with the lender for a certain amount of money to build the improvements.
What kind of mortgage does he have?
Blanket mortgage
Package mortgage
Construction mortgage
New home mortgage - answer -Construction mortgage
The lender and borrower agree to adjust the interest rate periodically to a new interest rate
based on a predetermined index in the economy. This is a ____________ mortgage.
Variable mortgage
Adjustable rate mortgage
Floating mortgage
Does not exist - answer -Adjustable rate mortgage
2|Page
, Mortgage insurance is typically required when the LTV is greater than ___________%.
75%
80%
85%
90% - answer -80%
Lending institutions often change interest on ______________ at a rate that is higher than a
conventional mortgage in order to compensate for carrying more risk.
Predatory mortgages
FICO mortgages
Participation mortgages
Subprime mortgages
Next question - answer -Subprime mortgages
Which of the following is not allowed under FHA loans?
Vacation home
Condominium
Manufactured home
Buy land and build a home - answer -Vacation home
3|Page
