Texas Principles of Real Estate 2 Exam | Complete Guide with Ques tions and Verified Answers| Already Grade A| 2023/ 2024 New Upda ted QUESTION What does a buyer receive until the debt is fully paid in case of installment land sales contract? Answer: Equitable title QUESTION What type of loan is considered an expandable one? Answer: Open -end QUESTION When a buyer borrows from the seller in addition to the lender, this is known as what? Answer: Purchase money mortgage QUESTION What are some of the risks included in construction loans? Answer: Inadequate protection against mechanics' liens Financial failure of contractors or subcontractors Potential delays in construction completion QUESTION Which type of mortgage usually includes all the personal property and appliances that are installed on the property? Answer: A package mortgage QUESTION Making home improvements, paying college tuition, paying medical ex - penses, and/or taking a vacation would be all good reasons to utilize what type of loan? Answer: Home equity loan QUESTION Primary mortgage market lenders. Answer: Professionals who originate loans which means they make the money available directly to borrowers. QUESTION Savings and loan association. Answer: A financial institution whose primary function is to promote thrift and homeownership. They also invest at least part of the deposits made by their customers in residential mortgage loans. QUESTION Commercial bank. Answer: . A financial institution that is designed to act as a depos - itory for funds and as a lender for commercial activities, usually short -term loans. QUESTION Demand accounts. Answer: Personal and business checking accounts that allow mon - ey to be withdrawn at any time by a depositor. The bank rarely uses these funds for mortgage lending. QUESTION Credit unions Answer: Nonprofit financial institutions that can offer higher interest rates on deposits because they don't pay income tax. QUESTION Real Estate Investment Trusts (REIT). Answer: A method of pooling investment mon - ey using the trust form of ownership if certain tax requirements are met which allow the avoidance of corporate tax. QUESTION Judicial foreclosure. Answer: The sale of the mortgaged property under the supervi - sion of the court. Proceeds go first to satisfy the mortgage, then other lien holders, and finally the borrower. QUESTION Non-judicial foreclosure. Answer: The process whereby the lender gives the borrower a notice of default (NOD) and the intent to sell the property in a form prescribed by that state's statute. Sometimes referred to as a "power -
of-sale" foreclosure. QUESTION Deed in lieu of foreclosure. Answer: The voluntary transfer of the deed from a default - ing borrower to lender transferring legal title. This does not terminate any existing liens on the property. QUESTION Right of redemption. Answer: The right to reclaim a property that has been foreclosed by paying off amounts owed to creditors, including interest and costs. Also called equity of redemption. QUESTION Deficiency judgment. Answer: Court order sought by lender if property sale does not yield sufficient funds to cover the amounts owed which enables the lender to attach and foreclose a judgment lien on other real or personal property the borrower owns. QUESTION Points. Answer: Fee charged by lender at settlement that results in the lender's effec - tive yield on the money borrowed. One point equals one percent of the loan amount.
of-sale" foreclosure. QUESTION Deed in lieu of foreclosure. Answer: The voluntary transfer of the deed from a default - ing borrower to lender transferring legal title. This does not terminate any existing liens on the property. QUESTION Right of redemption. Answer: The right to reclaim a property that has been foreclosed by paying off amounts owed to creditors, including interest and costs. Also called equity of redemption. QUESTION Deficiency judgment. Answer: Court order sought by lender if property sale does not yield sufficient funds to cover the amounts owed which enables the lender to attach and foreclose a judgment lien on other real or personal property the borrower owns. QUESTION Points. Answer: Fee charged by lender at settlement that results in the lender's effec - tive yield on the money borrowed. One point equals one percent of the loan amount.
