Champions Real Estate Finance Exam Questions and Answers 2023

Loan-to-Value Ratio (LTV) - ANSWER The percentage of the lesser of the appraised value or sales price that the lender will lend. ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to 80% of the sales price or appraised value, whichever is lower. Package Mortgage - ANSWER Includes both real and personal property ( fixtures and furnishings) Blanket Mortgage - ANSWER Covers more than one piece of property. Wraparound Mortgage - ANSWER Method of financing which preserves the low, existing interest rate on the original note. Open-End Mortgage - ANSWER Permits additional borrowing on the same note. This is sometimes called a credit card mortgage or a home equity line of credit - HELOC. Budget Mortgage - ANSWER The monthly house payment includes principal, interest, taxes and insurance (known as PITI) Collateral -Dependent Loans - ANSWER A hard money loan is a specific type of asset-based financing in which a borrower receives funds secured by the value of a parcel of real estate. Character - ANSWER Is a measure of the willingness of a borrower to make on-time payments. Credit character is revealed in the borrower's credit report. Capacity - ANSWER Is a measure of the borrower's ability to repay the debt, and is demonstrated through current earnings and job stability.