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TEXAS PRE-LICENSE - REAL ESTATE
FINANCE PRACTICE EXAM QUESTIONS
AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+ LATEST UPDATE
| 2024-2025
What is a mortgage banker?
✓ The correct answer is that a mortgage banker is an entity or person who originates and
services mortgage loans using their own funds. They usually provide financing on behalf
of large investors.
Eloise's loan is neither insured by the government nor guaranteed by the government. Which
of these BEST describes the kind of loan she has?
✓ Conventional loans are neither guaranteed nor insured by the government. Conforming
loans CAN be conventional loans, but they must meet other criteria as well.
For a loan to fall under RESPA, it has to be what is called a(n):
✓ federally related mortgage loan
Why would a lender want to sell their loans on the secondary mortgage market?
✓ Selling their loans allows them to get money faster.
Under what conditions could a lender seek a deficiency judgment?
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✓ If a borrower defaults, and the sale of the foreclosed home doesn't cover the loan and
expenses of foreclosure, the lender can seek a deficiency judgment.
What does this formula solve for: (PITI + Long-term liabilities) ÷ Gross monthly income?
✓ total debt service ratio
Which of the following institutions has 11 districts and the purpose to support residential
mortgage lending and related community investment?
✓ Federal Home Loan Bank System
What is a back-end ratio?
✓ a person's total monthly expenses divided by their monthly income.
Which of these statements most accurately describes the 203(b) FHA loan?
✓ It is the most popular kind of FHA loan.
Which of these actions would constitute actual notice?
✓ No, recording a deed creates constructive notice. The answer is that Christine looking up a
deed creates actual notice.
How does the VA pay for its loan guarantee program?
✓ by charging a funding fee
Which of the following is one of the federal government's monetary powers?
|
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✓ Customer Support: [+254707240657]
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✓ lowering the interest rate for member banks by a half percentage point is an example of
the federal government's monetary powers.
Ramsey is considering an ARM with an initial rate of 5.13%. The margin is 2%, and the initial
index rate is 3.13% The initial rate will adjust every four years. The lifetime cap is 3%. What
is the highest rate Ramsey could pay?
✓ 5.13% plus the lifetime cap of 3% is 8.13%.
Termite infestations, mold problems, a falling-in roof, lead-based paint, asbestos, and flood
damage are all attributes of what kind of property, according to lender classifications?
✓ a physically distressed property
What happens to a borrower's PMI when the equity in their property reaches 22%?
✓ the PMI is automatically removed. The borrower doesn't have to be found credit-worthy.
What is the main difference between credit unions and banks?
✓ Credit unions require customers to be members, tend to put community before profits, but
offer the same services as banks.
What is another name for the process of compound interest causing a loan debt to increase,
despite a borrower making payments?
✓ Negative amortization
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
TEXAS PRE-LICENSE - REAL ESTATE
FINANCE PRACTICE EXAM QUESTIONS
AND CORRECT DETAILED ANSWERS
|ALREADY GRADED A+ LATEST UPDATE
| 2024-2025
What is a mortgage banker?
✓ The correct answer is that a mortgage banker is an entity or person who originates and
services mortgage loans using their own funds. They usually provide financing on behalf
of large investors.
Eloise's loan is neither insured by the government nor guaranteed by the government. Which
of these BEST describes the kind of loan she has?
✓ Conventional loans are neither guaranteed nor insured by the government. Conforming
loans CAN be conventional loans, but they must meet other criteria as well.
For a loan to fall under RESPA, it has to be what is called a(n):
✓ federally related mortgage loan
Why would a lender want to sell their loans on the secondary mortgage market?
✓ Selling their loans allows them to get money faster.
Under what conditions could a lender seek a deficiency judgment?
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
, TestTrackers: Unlock Your Exam Potential! | Quality Practice Materials | Boost Your Confidence Today!
✓ If a borrower defaults, and the sale of the foreclosed home doesn't cover the loan and
expenses of foreclosure, the lender can seek a deficiency judgment.
What does this formula solve for: (PITI + Long-term liabilities) ÷ Gross monthly income?
✓ total debt service ratio
Which of the following institutions has 11 districts and the purpose to support residential
mortgage lending and related community investment?
✓ Federal Home Loan Bank System
What is a back-end ratio?
✓ a person's total monthly expenses divided by their monthly income.
Which of these statements most accurately describes the 203(b) FHA loan?
✓ It is the most popular kind of FHA loan.
Which of these actions would constitute actual notice?
✓ No, recording a deed creates constructive notice. The answer is that Christine looking up a
deed creates actual notice.
How does the VA pay for its loan guarantee program?
✓ by charging a funding fee
Which of the following is one of the federal government's monetary powers?
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
, TestTrackers: Unlock Your Exam Potential! | Quality Practice Materials | Boost Your Confidence Today!
✓ lowering the interest rate for member banks by a half percentage point is an example of
the federal government's monetary powers.
Ramsey is considering an ARM with an initial rate of 5.13%. The margin is 2%, and the initial
index rate is 3.13% The initial rate will adjust every four years. The lifetime cap is 3%. What
is the highest rate Ramsey could pay?
✓ 5.13% plus the lifetime cap of 3% is 8.13%.
Termite infestations, mold problems, a falling-in roof, lead-based paint, asbestos, and flood
damage are all attributes of what kind of property, according to lender classifications?
✓ a physically distressed property
What happens to a borrower's PMI when the equity in their property reaches 22%?
✓ the PMI is automatically removed. The borrower doesn't have to be found credit-worthy.
What is the main difference between credit unions and banks?
✓ Credit unions require customers to be members, tend to put community before profits, but
offer the same services as banks.
What is another name for the process of compound interest causing a loan debt to increase,
despite a borrower making payments?
✓ Negative amortization
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
