CA REAL ESTATE FINANCE COURSE
(PRACTICE EXAM) QUESTIONS AND
ANSWERS
Over how many years is a residential income-producing property depreciated? ✅✅ANSW-27.5
years
What's a typical loan-to-value ratio for an FHA loan? ✅✅ANSW-96.5%
Who or what entity directs the activities of credit unions? ✅✅ANSW-A board of directors
Who is responsible for paying the loan-related closing costs in a financed real estate transaction?
✅✅ANSW-Buyer
Though not a loan, buyers may be able to enlist the help of ______, who can give them a tax-free gift
to help them with their purchase. ✅✅ANSW-Individuals, such as family members
The ______ was enacted in 2010 to create stricter regulation of the financial services industry to
reduce costs for consumers from (for instance), undisclosed kickbacks. ✅✅ANSW-Dodd-Frank
Wall Street Reform and Consumer Protection Act
Which process temporarily stalls foreclosure? ✅✅ANSW-Filing for Chapter 7 bankruptcy
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify
as soon as he receives the form? ✅✅ANSW-That the borrower and seller names, the property
address, and the sales price are accurate and spelled correctly
Dorinda is an investor. She recently purchased shares in a tranche that holds mortgages and
mortgage-backed securities. In what did she invest? ✅✅ANSW-Collateralized mortgage
obligation
A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are
paid. At what price must the house sell? ✅✅ANSW-$315,789
, A buyer with a $400,000 loan has a monthly principal and interest payment of $2,661.21. If
$2,333.33 is interest, what is the new principal balance after the first payment is applied?
✅✅ANSW-$399,672.12
Which of the following could an investor who sells an apartment house buy using a 1031 exchange?
✅✅ANSW-Duplex, office building, or warehouse
Which of the following is a typical benefit of a retirement account? ✅✅ANSW-Tax deferment of
income
What is the purpose behind Appraiser Independence Requirements? ✅✅ANSW-To protect
appraisers' ability to assess an accurate value for a property by avoiding outside pressure or
influence
Which generation are children of the Silent Generation and products of the U.S. population
explosion after World War II? ✅✅ANSW-Baby Boomers
Which of the following would be a receipt you should save for tax purposes? ✅✅ANSW-A toll fee
for a business trip
Randall needs some new equipment for his ranching operation, and he needs a loan to purchase the
equipment. When he approaches his local bank and applies for a Farm Credit System loan, how is
the loan funded? ✅✅ANSW-From the sale of Farm Credit System debt securities
You want to make $50,000 in a year from your real estate business. You know that about 15% of the
leads you get turn into clients. You earn an average of $8,000 on every closed transaction. Is this
everything you need to know to use a funnel to determine how many leads you need to generate to
get your $50,000? ✅✅ANSW-No, you also need to know the percentage of clients who turn into
closed transactions.
How long does the borrower have to pay private mortgage insurance? ✅✅ANSW-Until the
borrower reaches a 22% equity position
Natalie is a single mother of twins and receives government assistance to help make ends meet.
She's been living with her mother for the last few years but really wants to buy her own home to
(PRACTICE EXAM) QUESTIONS AND
ANSWERS
Over how many years is a residential income-producing property depreciated? ✅✅ANSW-27.5
years
What's a typical loan-to-value ratio for an FHA loan? ✅✅ANSW-96.5%
Who or what entity directs the activities of credit unions? ✅✅ANSW-A board of directors
Who is responsible for paying the loan-related closing costs in a financed real estate transaction?
✅✅ANSW-Buyer
Though not a loan, buyers may be able to enlist the help of ______, who can give them a tax-free gift
to help them with their purchase. ✅✅ANSW-Individuals, such as family members
The ______ was enacted in 2010 to create stricter regulation of the financial services industry to
reduce costs for consumers from (for instance), undisclosed kickbacks. ✅✅ANSW-Dodd-Frank
Wall Street Reform and Consumer Protection Act
Which process temporarily stalls foreclosure? ✅✅ANSW-Filing for Chapter 7 bankruptcy
Cassie is helping her buyer client, Gus, prepare for closing. What should she encourage him to verify
as soon as he receives the form? ✅✅ANSW-That the borrower and seller names, the property
address, and the sales price are accurate and spelled correctly
Dorinda is an investor. She recently purchased shares in a tranche that holds mortgages and
mortgage-backed securities. In what did she invest? ✅✅ANSW-Collateralized mortgage
obligation
A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are
paid. At what price must the house sell? ✅✅ANSW-$315,789
, A buyer with a $400,000 loan has a monthly principal and interest payment of $2,661.21. If
$2,333.33 is interest, what is the new principal balance after the first payment is applied?
✅✅ANSW-$399,672.12
Which of the following could an investor who sells an apartment house buy using a 1031 exchange?
✅✅ANSW-Duplex, office building, or warehouse
Which of the following is a typical benefit of a retirement account? ✅✅ANSW-Tax deferment of
income
What is the purpose behind Appraiser Independence Requirements? ✅✅ANSW-To protect
appraisers' ability to assess an accurate value for a property by avoiding outside pressure or
influence
Which generation are children of the Silent Generation and products of the U.S. population
explosion after World War II? ✅✅ANSW-Baby Boomers
Which of the following would be a receipt you should save for tax purposes? ✅✅ANSW-A toll fee
for a business trip
Randall needs some new equipment for his ranching operation, and he needs a loan to purchase the
equipment. When he approaches his local bank and applies for a Farm Credit System loan, how is
the loan funded? ✅✅ANSW-From the sale of Farm Credit System debt securities
You want to make $50,000 in a year from your real estate business. You know that about 15% of the
leads you get turn into clients. You earn an average of $8,000 on every closed transaction. Is this
everything you need to know to use a funnel to determine how many leads you need to generate to
get your $50,000? ✅✅ANSW-No, you also need to know the percentage of clients who turn into
closed transactions.
How long does the borrower have to pay private mortgage insurance? ✅✅ANSW-Until the
borrower reaches a 22% equity position
Natalie is a single mother of twins and receives government assistance to help make ends meet.
She's been living with her mother for the last few years but really wants to buy her own home to
