Principles of Real Estate 2 Exam With 100% Correct Answers

Principles of Real Estate 2 Exam With 100% Correct Answers Profit: - answerA financial gain. Making more money selling a product than was spent buying or producing the product. Loss: - answerA financial loss — Making less money selling a product than was spent buying or producing the product. Interest: - answerMoney repaid regularly at a specified rate as compensation for money lent. Principal: - answerThe amount lent to a borrower to purchase a house — the borrower pays the lender interest in exchange for the principal. Mortgage: - answerA mortgage is a secured loan that is tied to real estate, where the borrower has to pay the money back to the lender on a set schedule and amount of payments. Mortgages are also considered "liens against property" or "claims on property." The borrower pays the lender interest in exchange for the: - answerprincipal Down Payment: - answerThe initial payment made when buying something on credit; a down payment is paid directly by the buyer to the seller. The standard down payment is 20% of the overall house price, and while a 20% down payment is recommended, it is not required. The minimum down payment required by mortgage lenders is 3% of the house's price. Amortization: - answerThe repayment of a loan over time in equal installments that include principal and interest. With an amortizing loan, mortgage payments are: - answerequal installments that go towards principal and interest For the licensing exam, your calculator MUST: - answerBe able to do basic arithmetic To turn a fraction into a decimal, you divide the denominator by the numerator. - answerFALSE (Explanation: Whenever you need to transform a fraction into a decimal, divide the numerator (top number) by the denominator (bottom number) When converting a double-digit percentage into a decimal, you'll start: - answerfarthest to the right and move the decimal to the left twice The decimal equivalent of 345% is ____. - answer3.45 Part: - answerA portion of the total amount, the numerator (3 of 3⁄4) Percentage: - answerA rate or amount in each hundred (3⁄4 is 75% written as a fraction) Total: - answerThe "final" or "end result" number, the denominator (4 of 3⁄4) To solve for the total, which formula should you use? - answerTotal = part / percentage To solve for the part, you need to multiply the total by the percentage. - answerTRUE When solving for percentage, you'll need to ______. - answerdivide the part by the total A listing broker made 3% commission on a $475,000 sale, How much did the listing broker make in commission? - answer$14,250 What is the sum of money a homeowner is approved for called? - answerthe principal How do you find the monthly interest rate? - answerby dividing the annual interest rate by 12 Eden puts an offer in on a three-story Victorian home in Hudson. She puts earnest money into an escrow account but the deal falls through - it turns out the house was infested with termites and didn't pass inspection. Eden is worried she won't receive her earnest money. Her agent tells her that: - answerHer earnest money will be returned to her; her contract specifies that she will receive this money if a property doesn't pass inspection. What happens to the earnest money on closing day? - answerIt is transferred to the seller. If a buyer makes a 20% down payment and obtains a $100,000 mortgage, what is the sales price of the property? - answer$125,000 Shawn is buying a house. He put 20% down as a down payment and obtained a $150,000 mortgage from a lender. What is the total sales price of Shawn's purchase? - answer$187,500 TRUE or FALSE: Amortization is the inflated repayment of a loan upon its due date. - answerFALSE (Explanation: Amortization is the repayment of a loan principal over time.) Origination Points: - answerFees charged to compensate loan officers for underwriting and administering the loan Discount Points - - answerFees charged in exchange for a lower interest rate on the loan "Breaking even": - answerrefers to the point when a loan with an initial fee for discount points catches up to a loan without discount points. How much would 1 discount point cost for a $25,000 loan? - answer$250