UGBA 135 HW 5 EXAM QUESTIONS AND
ANSWERS. VERIFIED 2025/2026.
A first mortgage is all of the following except
A. It guarantees payment of a second mortgage
B. A legal loan document
C. It has first claim on the property
D. It is secured by a piece of property - ANS It guarantees payment of a second mortgage
An additional loan taken against a property is called
A. Equity
B. Collateral
C. First mortgage
D. Second mortgage - ANS Second mortgage
In real estate, equity is
A. The amount of the first mortgage
B. The difference between the first mortgage and the second mortgage
C. The difference between the value of the property less all debts against the property
D. The amount of the outstanding loans - ANS The difference between the value of the
property less all debts against the property
A home equity loan is
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. Secured by the mortgage on the property
B. Subject to a variable rate of interest
C. A one-time lump sum loan
D. All the above - ANS A one-time lump sum loan
A home equity line of credit is
A. Secured by the mortgage on the property
B. A revolving line of credit
C. Unsecured, which is why it's so popular
D. All the above - ANS A revolving line of credit
Private mortgage insurance
A. Costs about one percent of the loan amount per year
B. Is required if your equity is less that 20%
C. May or may not be tax deductible
D. All the above - ANS All the above
Rapid Rescore can help achieve the following
A. Update your credit file
B. Get a longer term mortgage
C. Reduce property taxes
D. None of the above - ANS Update your credit file
Refinancing a mortgage may be done to:
A. Consolidate first and second mortgages
B. Lower the monthly payment
C. Lower interest rates
D. All the above. - ANS All the above.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, The loan-to-value ratio ("LTV") is when the value of the loan is related to:
A. The cost of refinancing
B. The value of a short sale
C. The value of the house
D. The amount of government subsidy - ANS The value of the house
The government subsidizes home ownership through the tax code by allowing a tax deduction
for:
A. Repairs
B. Homeowner's insurance
C. Maintenance
D. Property taxes - ANS Property taxes
Negative amortization occurs when there is:
A. A refinancing
B. When a loan is more than 3 times your income
C. A short sale
D. None of the above - ANS None of the above
The "benchmark" home loan is 20% down payment and a:
A. 15-year loan with an adjustable interest rate
B. 30-year loan with a fixed rate of interest
C. 20-year loan with an adjustable interest rate
D. 10-year loan, interest only payments - ANS 30-year loan with a fixed rate of interest
When the property is sold, the real estate commission is usually paid by:
A. Shared by the purchaser and the seller
B. The seller of the property
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
ANSWERS. VERIFIED 2025/2026.
A first mortgage is all of the following except
A. It guarantees payment of a second mortgage
B. A legal loan document
C. It has first claim on the property
D. It is secured by a piece of property - ANS It guarantees payment of a second mortgage
An additional loan taken against a property is called
A. Equity
B. Collateral
C. First mortgage
D. Second mortgage - ANS Second mortgage
In real estate, equity is
A. The amount of the first mortgage
B. The difference between the first mortgage and the second mortgage
C. The difference between the value of the property less all debts against the property
D. The amount of the outstanding loans - ANS The difference between the value of the
property less all debts against the property
A home equity loan is
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A. Secured by the mortgage on the property
B. Subject to a variable rate of interest
C. A one-time lump sum loan
D. All the above - ANS A one-time lump sum loan
A home equity line of credit is
A. Secured by the mortgage on the property
B. A revolving line of credit
C. Unsecured, which is why it's so popular
D. All the above - ANS A revolving line of credit
Private mortgage insurance
A. Costs about one percent of the loan amount per year
B. Is required if your equity is less that 20%
C. May or may not be tax deductible
D. All the above - ANS All the above
Rapid Rescore can help achieve the following
A. Update your credit file
B. Get a longer term mortgage
C. Reduce property taxes
D. None of the above - ANS Update your credit file
Refinancing a mortgage may be done to:
A. Consolidate first and second mortgages
B. Lower the monthly payment
C. Lower interest rates
D. All the above. - ANS All the above.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, The loan-to-value ratio ("LTV") is when the value of the loan is related to:
A. The cost of refinancing
B. The value of a short sale
C. The value of the house
D. The amount of government subsidy - ANS The value of the house
The government subsidizes home ownership through the tax code by allowing a tax deduction
for:
A. Repairs
B. Homeowner's insurance
C. Maintenance
D. Property taxes - ANS Property taxes
Negative amortization occurs when there is:
A. A refinancing
B. When a loan is more than 3 times your income
C. A short sale
D. None of the above - ANS None of the above
The "benchmark" home loan is 20% down payment and a:
A. 15-year loan with an adjustable interest rate
B. 30-year loan with a fixed rate of interest
C. 20-year loan with an adjustable interest rate
D. 10-year loan, interest only payments - ANS 30-year loan with a fixed rate of interest
When the property is sold, the real estate commission is usually paid by:
A. Shared by the purchaser and the seller
B. The seller of the property
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
