Real Estate Test Chapter 4 – Financing, Loans, Mortgages & Deeds – Practice Questions with Answers

Real
Real Estate Test Estate4Test
Chapter - Chapter
Financing, 4 Mortgages & Deeds Practice Questions with Answers
Loans,
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-test-chapter-4-
7411340




4.1 - Leverage When someone chooses to f i nance the bul k of a purchase.




A ri sk when l everagi ng that prop. val ue wi l l f al l causi ng rents to f al l bel ow the
4.1 - Negati ve Cash F l ow
cost of the f i nance payments.




Loan-to-Val ue rati o.


Ri sk f actor used by l enders.
4.1 - LT V Rati o

T he 1st mortgage di vi ded by the l esser of (1) apprai sed val ue or (2) purchase
pri ce




1% of the l oan amount

4.1 - Poi nts
Used by l enders to measure di scount charges and other costs such as ori gi nati on
f ees and PMI premi ums.




1

, Real
Real Estate Test Estate4Test
Chapter - Chapter
Financing, 4 Mortgages & Deeds Practice Questions with Answers
Loans,
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-test-chapter-4-
7411340




4.1 - Ori gi nati on F ee A f ee the l ender charges to cover the cost of processi ng a l oan.




4.1 - D i scounts A f orm of prepai d i nterest pai d to a l ender to decrease the rate on the l oan.




4.1 - Broker Commi ssi ons T he commi ssi on earned by a broker




PMI


4.1 - Pri vate Mortgage I nsurance I nsurance f or hi gh LT V l oans.


I nsures the l ender.




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