National Real Estate Exam PSI: Guaranteed ...
Academic Improvement with Premier Questions &
Comprehensive Answer Explanations
In what way is a townhome similar to a single-family detached home?
-It often has a detached garage.
-It's also detached.
-Ownership includes both the structure and the land.
-They're always multi-story. - CORRECT ANS- -Ownership includes both the structure and
the land.
**Townhomes and single-family detached homes are similar because ownership includes
both the structure and the land.
Henrietta is 17 years old. She wants to sell the property given to her by her grandmother.
Which covenant provided by the general warranty deed may prevent her from doing so?
-The covenant of further assurances
-The covenant of seisin
-The covenant of the right to convey
-The covenant of warranty - CORRECT ANS- -The covenant of the right to convey
**The covenant of the right to convey requires that the grantor have legal capacity to
convey, and Henrietta is a minor.
In an amortized loan, the interest portion of the mortgage payment generally ______ over
the life of the loan.
Page 1 of 21 2025/2026
,-Decreases
-Has no bearing on the total
-Increases
-Remains the same - CORRECT ANS- -Decreases
**The interest portion of the payment generally decreases over the life of the mortgage loan
as the principal portion increases.
When purchasing a short sale or foreclosure, what's one of the biggest frustrations buyers
face?
-Insurance companies' refusal to insure homes sold as distressed properties
-Restrictions on the amount a lender will finance on a distressed property
-The difficulty of finding a real estate professional to help them with the purchase.
-The length of time it takes to purchase a distressed property - CORRECT ANS- -The length
of time it takes to purchase a distressed property
**The purchase of a distressed property can take at least twice as long as the purchase of a
traditional property.
Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest
rate. How much would their principal and interest payment be per month? Plug in the
numbers using the amortization chart in your resources see what the payment per month
would be. Remember: The monthly payment multiplier is per $1,000 of the mortgage.
$1,001.32
$1,073.64
$1,296.21
Page 2 of 21 2025/2026
, $1.347.91 - CORRECT ANS- -$1,073.64
**The estimated payment is $1,073.64. Remember to divide $200,000 by 1,000, then
multiply the factor (5.36822) by 200.
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid
private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the
purchase price in closing costs. How much money should he bring to closing?
$106,250
$156,250
$31,250
$81,250 - CORRECT ANS- -$106,250
**Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a
$50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs
$106,250 to close ([$125,000 - $50,000] + $31,250).
What factors directly affect an adjustable rate mortgage?
-Amortization tables, index, and rate
-Index, tax basis, and margin
-Rate, index, and margin
-Rate, loan-to-value ratio, and index - CORRECT ANS- -Rate, index, and margin
**Rate adjustments are based on index rates, such as London Interbank Offered Rate
(LIBOR), from which lenders determine their margins and the rate that they charge
customers at each adjustment.
Page 3 of 21 2025/2026
Academic Improvement with Premier Questions &
Comprehensive Answer Explanations
In what way is a townhome similar to a single-family detached home?
-It often has a detached garage.
-It's also detached.
-Ownership includes both the structure and the land.
-They're always multi-story. - CORRECT ANS- -Ownership includes both the structure and
the land.
**Townhomes and single-family detached homes are similar because ownership includes
both the structure and the land.
Henrietta is 17 years old. She wants to sell the property given to her by her grandmother.
Which covenant provided by the general warranty deed may prevent her from doing so?
-The covenant of further assurances
-The covenant of seisin
-The covenant of the right to convey
-The covenant of warranty - CORRECT ANS- -The covenant of the right to convey
**The covenant of the right to convey requires that the grantor have legal capacity to
convey, and Henrietta is a minor.
In an amortized loan, the interest portion of the mortgage payment generally ______ over
the life of the loan.
Page 1 of 21 2025/2026
,-Decreases
-Has no bearing on the total
-Increases
-Remains the same - CORRECT ANS- -Decreases
**The interest portion of the payment generally decreases over the life of the mortgage loan
as the principal portion increases.
When purchasing a short sale or foreclosure, what's one of the biggest frustrations buyers
face?
-Insurance companies' refusal to insure homes sold as distressed properties
-Restrictions on the amount a lender will finance on a distressed property
-The difficulty of finding a real estate professional to help them with the purchase.
-The length of time it takes to purchase a distressed property - CORRECT ANS- -The length
of time it takes to purchase a distressed property
**The purchase of a distressed property can take at least twice as long as the purchase of a
traditional property.
Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest
rate. How much would their principal and interest payment be per month? Plug in the
numbers using the amortization chart in your resources see what the payment per month
would be. Remember: The monthly payment multiplier is per $1,000 of the mortgage.
$1,001.32
$1,073.64
$1,296.21
Page 2 of 21 2025/2026
, $1.347.91 - CORRECT ANS- -$1,073.64
**The estimated payment is $1,073.64. Remember to divide $200,000 by 1,000, then
multiply the factor (5.36822) by 200.
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid
private mortgage insurance (PMI) on his conventional loan, and he owes 5% of the
purchase price in closing costs. How much money should he bring to closing?
$106,250
$156,250
$31,250
$81,250 - CORRECT ANS- -$106,250
**Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a
$50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs
$106,250 to close ([$125,000 - $50,000] + $31,250).
What factors directly affect an adjustable rate mortgage?
-Amortization tables, index, and rate
-Index, tax basis, and margin
-Rate, index, and margin
-Rate, loan-to-value ratio, and index - CORRECT ANS- -Rate, index, and margin
**Rate adjustments are based on index rates, such as London Interbank Offered Rate
(LIBOR), from which lenders determine their margins and the rate that they charge
customers at each adjustment.
Page 3 of 21 2025/2026
