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RESIDENTIAL MORTGAGE LENDING CERTIFICATION EXAM PRACTICE
QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALE .
1. Residential mortgage lending primarily involves:
A. Commercial buildings only
B. Home loans for individuals
C. Business loans only
D. Auto loans
Answer: B
Rationale: Residential lending focuses on consumer home financing—
providing loans to individuals for the purchase or refinance of
residential properties. This distinguishes it from commercial lending,
which involves business properties.
2. A residential mortgage loan is secured by:
,A. A car
B. A home or real property
C. Stocks
D. Personal income
Answer: B
Rationale: In a mortgage loan, the property itself serves as collateral. If
the borrower defaults, the lender can foreclose on the property to
recover the loan amount.
3. The borrower in a mortgage loan is called the:
A. Mortgagee
B. Mortgagor
C. Seller
D. Appraiser
Answer: B
Rationale: The mortgagor is the borrower who pledges the property as
security for the loan.
,4. The lender in a mortgage loan is called the:
A. Mortgagor
B. Mortgagee
C. Buyer
D. Trustee
Answer: B
Rationale: The mortgagee is the lender who holds the mortgage as
security for the loan.
5. A promissory note is:
A. Property deed
B. Borrower's promise to repay loan
C. Insurance policy
D. Appraisal report
, Answer: B
Rationale: A promissory note is the legal document containing the
borrower's promise to repay the loan according to specified terms,
including interest rate, payment schedule, and maturity date.
6. A mortgage or deed of trust is:
A. Insurance document
B. Security instrument
C. Tax form
D. Income statement
Answer: B
Rationale: The mortgage or deed of trust is the security instrument that
secures the loan with the property as collateral. It gives the lender the
right to foreclose if the borrower defaults.
7. Amortization refers to:
A. Loan cancellation
RESIDENTIAL MORTGAGE LENDING CERTIFICATION EXAM PRACTICE
QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALE .
1. Residential mortgage lending primarily involves:
A. Commercial buildings only
B. Home loans for individuals
C. Business loans only
D. Auto loans
Answer: B
Rationale: Residential lending focuses on consumer home financing—
providing loans to individuals for the purchase or refinance of
residential properties. This distinguishes it from commercial lending,
which involves business properties.
2. A residential mortgage loan is secured by:
,A. A car
B. A home or real property
C. Stocks
D. Personal income
Answer: B
Rationale: In a mortgage loan, the property itself serves as collateral. If
the borrower defaults, the lender can foreclose on the property to
recover the loan amount.
3. The borrower in a mortgage loan is called the:
A. Mortgagee
B. Mortgagor
C. Seller
D. Appraiser
Answer: B
Rationale: The mortgagor is the borrower who pledges the property as
security for the loan.
,4. The lender in a mortgage loan is called the:
A. Mortgagor
B. Mortgagee
C. Buyer
D. Trustee
Answer: B
Rationale: The mortgagee is the lender who holds the mortgage as
security for the loan.
5. A promissory note is:
A. Property deed
B. Borrower's promise to repay loan
C. Insurance policy
D. Appraisal report
, Answer: B
Rationale: A promissory note is the legal document containing the
borrower's promise to repay the loan according to specified terms,
including interest rate, payment schedule, and maturity date.
6. A mortgage or deed of trust is:
A. Insurance document
B. Security instrument
C. Tax form
D. Income statement
Answer: B
Rationale: The mortgage or deed of trust is the security instrument that
secures the loan with the property as collateral. It gives the lender the
right to foreclose if the borrower defaults.
7. Amortization refers to:
A. Loan cancellation
