South Carolina Real Estate Exam (State Portion Only) Questions and Answers

South Carolina Real Estate Exam (State Portion Only) Questions and Answers The creditor should ascertain the preference of the _____ as to legal counsel relating to closing the loan and insurance agent. A) lender B) seller C) real estate agent D) borrower - Correct Answer ️️ -D) borrower The assumption fee when assuming a loan in SC may not exceed _____. A) 1% of the loan or $400, whichever is greater B) 1/2% of the loan C) $500 D) 1% of the loan or $400, whichever is less - Correct Answer ️️ -D) 1% of the loan or $400, whichever is less Loans that can be prepaid without penalty are those which are _____. A) $150,000 or less B) Residential mortgage loans of $150,000 or less C) Investment mortgage loans of $150,000 or less D) Commercial mortgage loans of $150,000 or less - Correct Answer ️️ -B) Residential mortgage loans of $150,000 or less No greater than _____ interest can be charged in South Carolina on loans that are agreed to orally. A) 3% B) 4% C) 6% D) 12% - Correct Answer ️️ -C) 6% In South Carolina, if a mortgage loan is written, the amount of interest that can be charged is _____. A) no more than 6% B) any amount agreed to by the parties C) no more than 18% D) not covered by this law - Correct Answer ️️ -B) any amount agreed to by the parties Federal law allows lenders to charge a pre-payment penalty on adjustable rate mortgages. How does this affect borrowers in South Carolina? A) Borrowers in South Carolina do not pay a pre-payment penalty on loans under $150,000 but federal law takes precedence on ARMs B) Although the federal law allows it, SC law does not allow a pre-payment penalty on ARMs C) ARMs do not have a pre-payment penalty as long as the mortgage balance does not exceed $150,000 D) ARMs do not have a pre-payment penalty as long as the mortgage balance does not exceed $250,000 - Correct Answer ️️ -B) Although the federal law allows it, SC law does not allow a pre-payment penalty on ARMs In South Carolina, the law has set an assessment rate. What is the rate for RESIDENTIAL OWNER-OCCUPIED property? A) 4% B) 6% C) 9 1/2% D) 10 1/2% - Correct Answer ️️ -A) 4% In South Carolina, the law has set an assessment rate. What is the rate for RENTAL NONOWNER-OCCUPIED property? A) 4% B) 6% C) 9 1/2% D) 10 1/2% - Correct Answer ️️ -B) 6% A person who is over 65 years of age may get a break on his/her Ad Valorem tax. What is the nature of this special treatment? A) With application, his/her appraised value will be reduced by $50,000 B) His/her assessed value will be reduced by $50,000 C) With application, his/her assessed value will be reduced by $20,000 D) With application, his/her appraised value will be reduced by $20,000 - Correct Answer ️️ -A) With application, his/her appraised value will be reduced by $50,000 The assessed value is $3,000 and the tax is based on 200 mills. How much is the tax? A) $500 B) $600 C) $700 D) $800 - Correct Answer ️️ -B) $600 [NOTE: ($3,000 assessed value)(0.200 mill rate) = $600 annual tax] The assessor's appraisal was $67,900 on the rental house owned by the three little pigs. They sold it and had a closing on August 18. What was the amount of taxes to be prorated at closing if the tax rate was 134 mills, the assessment rate was 6%, and the pigs agreed to pay through closing? (Use a 360 day year) A) $300.75 B) $325.75 C) $345.75 D) $365.75 - Correct Answer ️️ -C) $345.75 [NOTE: ($67,900 appraisal)(6% assessment rate on rental property) = $4,074 assessed value. Then, ($4,074 assessed value)(0.134 mill rate) = $545.916 annual tax. Now divide $545.916 by 360 days to get $1.51643/day. Because they closed on August 18th, there are 228 days from January 1st to August 18th. Therefore, ($1.51643/day)(228 days) = $345.75 in taxes. A property was assessed for tax purposes at 80% of its $140,000 purchase price. Using a tax rate of 25.8 mills, what will the annual taxes be on the property? A) $3,612.50 B) $2,889.60 C) $2,800.70 D) $2,064.80 - Correct Answer ️️ -B) $2,889.60 [NOTE: ($140,000 purchase price)(0.80) = $112,000 assessed value. Then, ($112,000 assessed value)(0.0258 mill rate) = $2,889.60 annual tax] "Ad valorem" tax refers to _____. A) surtax B) state sales tax C) a tax according to value D) a tax on property transfer - Correct Answer ️️ -C) a tax according to value In South Carolina, a person qualifies for the Homestead Exemption if he/she holds a fee simple title or a life estate and as of December 31 preceding the tax year of the exemption was a legal resident for one year and _____. A) has reached age 65, is blind, or declared pe