P a g e g |g1
CHAMPIONS REAL ESTATE FINANCE EXAM 20
g g g g g
25| BRAND NEW ACTUAL EXAM WITH 100% VE
g g g g g g g
RIFIED QUESTIONS AND CORRECT SOLUTION
g g g g
S| GUARANTEED VALUE PACK| ACE YOUR GRA
g g g g g g
DES.
1. Loan-to-ValuegRatiog(LTV)g-gcorrectganswerg-
gThegpercentagegofgtheglessergofgthegappraisedgvaluegorgsalesgpricegt
hatgtheglendergwillglend.
ex:gIfgagborrowergisgapprovedgforgang80%gloan,gitgmeansgthatgtheglender
gwillgloangupgtog80%gofgthegsalesgpricegorgappraisedgvalue,gwhichevergi
sglower.
2. PackagegMortgageg-gcorrectganswerg-
gIncludesgbothgrealgandgpersonalgpropertyg(gfixturesgandgfurnishings)
3. BlanketgMortgageg-gcorrectganswerg-
gCoversgmoregthangonegpiecegofgproperty.
4. WraparoundgMortgageg-gcorrectganswerg-
gMethodgofgfinancinggwhichgpreservesgtheglow,gexistingginterestgrateg
ongthegoriginalgnote.
, P a g e g |g2
5. Open-EndgMortgageg-gcorrectganswerg-
gPermitsgadditionalgborrowinggongthegsamegnote.gThisgisgsometimesgcall
edgagcreditgcardgmortgagegorgaghomegequityglinegofgcreditg-gHELOC.
6. BudgetgMortgageg-gcorrectganswerg-
gThegmonthlyghousegpaymentgincludesgprincipal,ginterest,gtaxesga
ndginsuranceg(knowngasgPITI)
7. Collateralg-DependentgLoansg-gcorrectganswerg-
gAghardgmoneygloangisgagspecificgtypegofgasset-
basedgfinancinggingwhichgagborrowergreceivesgfundsgsecuredgbygthegval
uegofgagparcelgofgrealgestate.
8. Characterg-gcorrectganswerg-
gIsgagmeasuregofgthegwillingnessgofgagborrowergtogmakegon-
timegpayments.gCreditgcharactergisgrevealedgingthegborrower'sgcreditgrep
ort.
9. Capacityg-gcorrectganswerg-
gIsgagmeasuregofgthegborrower'sgabilitygtogrepaygthegdebt,gandgisgdemo
nstratedgthroughgcurrentgearningsgandgjobgstability.
10. Capitalg-gcorrectganswerg-
gIsgthegsumgofgallgassetsgthatgthegborrowerghasgaccumulated.
, P a g e g |g3
11. Collateralg-gcorrectganswerg-
gIsgsomethinggofgvaluegthatgcangbegpledgedgasgsecuritygforgrepay
ment.
12. Yieldg-gcorrectganswerg-
gIsgthegreturngthatgtheginvestorgrecievesgovergtheglifegofgthegloan.g(Alsog
knowngasgprofit)
13. Originatorg-gcorrectganswerg-
gThegprocessgofgcreatinggagnewgmortgagegloan,gincludinggallgstepsgtakeng
bygaglendergtogattractgandgqualifygagborrower.
14. MortgagegBrokerg-gcorrectganswerg-
gTypicallygfunctionsgasgagmiddlemangbetweengthegborrowergandgtheglend
er,gnegotiating,gsellinggorgarranginggloansgtogbegdeliveredgtoglargerginves
tors.gAtgonegtimegoriginatedgupgtog80%gofgallgmortgagegloans.g(Backgongt
hegrise)
15. MortgagegBankerg-gcorrectganswerg-
gEntitiesgwhichgprovidegtheirgowngfundsgforgthegpurposegofgprovidinggmo
rtgagegfinancing,gasgopposedgtogcommercialgbanks/savingsgassociation
s.g(Held,gorg"Warehoused")
16. CorrespondentgLenderg-gcorrectganswerg-
gUsuallygsmallergingscalegthangmortgagegbankersgorgbrokers,gtheseglend
ersgtypicallygextendgloansgwithgtheirgowngfunds,gatgtheirgowngrisk.
, P a g e g |g4
17. Processingg-gcorrectganswerg-
gOncegapplicationgisgcompletegthegfilegmovesgintogthisgphase.
18. Underwritingg-gcorrectganswerg-
gThegdetailedgprocessgofgevaluatinggagborrower'sgloangapplicationgtogdet
erminegthegriskginvolvedgforgtheglender.
19. Closingg-gcorrectganswerg-
gThegconsummationgofgagrealgestategtransactiongingwhichgallgappro
priategdocumentsgaregsignedgandgthegproceedsgofgthegmortgageglo
angaregthengdisbursedgbygtheglender.
20. Servicingg-gcorrectganswerg-
gIncludesgcollectinggmonthlygpayments,gmaintaininggrecordsgofgpayme
ntsgandgbalances,gcollectinggandgpayinggtaxesgandginsuranceg(gandgm
anaginggescrowgandgimpoundgfunds)gremittinggfundsgtogthegnoteghold
er,gandgfollowinggupgongdelinquencies.
21. SupplygandgDemandg-gcorrectganswerg-
gangeconomicgconceptgthatgstatesgthatgthegpricegofgaggoodgrisesgandgfal
lsgdependinggonghowgmanygpeoplegwantgitgandgdependinggonghowgmu
chgofgtheggoodgisgavailable.
22. Fundingg-gcorrectganswerg-
gThegprocessgofgtransferringgfundsgtogagtitlegorgescrowgcompanygforgdisbu
rsement
CHAMPIONS REAL ESTATE FINANCE EXAM 20
g g g g g
25| BRAND NEW ACTUAL EXAM WITH 100% VE
g g g g g g g
RIFIED QUESTIONS AND CORRECT SOLUTION
g g g g
S| GUARANTEED VALUE PACK| ACE YOUR GRA
g g g g g g
DES.
1. Loan-to-ValuegRatiog(LTV)g-gcorrectganswerg-
gThegpercentagegofgtheglessergofgthegappraisedgvaluegorgsalesgpricegt
hatgtheglendergwillglend.
ex:gIfgagborrowergisgapprovedgforgang80%gloan,gitgmeansgthatgtheglender
gwillgloangupgtog80%gofgthegsalesgpricegorgappraisedgvalue,gwhichevergi
sglower.
2. PackagegMortgageg-gcorrectganswerg-
gIncludesgbothgrealgandgpersonalgpropertyg(gfixturesgandgfurnishings)
3. BlanketgMortgageg-gcorrectganswerg-
gCoversgmoregthangonegpiecegofgproperty.
4. WraparoundgMortgageg-gcorrectganswerg-
gMethodgofgfinancinggwhichgpreservesgtheglow,gexistingginterestgrateg
ongthegoriginalgnote.
, P a g e g |g2
5. Open-EndgMortgageg-gcorrectganswerg-
gPermitsgadditionalgborrowinggongthegsamegnote.gThisgisgsometimesgcall
edgagcreditgcardgmortgagegorgaghomegequityglinegofgcreditg-gHELOC.
6. BudgetgMortgageg-gcorrectganswerg-
gThegmonthlyghousegpaymentgincludesgprincipal,ginterest,gtaxesga
ndginsuranceg(knowngasgPITI)
7. Collateralg-DependentgLoansg-gcorrectganswerg-
gAghardgmoneygloangisgagspecificgtypegofgasset-
basedgfinancinggingwhichgagborrowergreceivesgfundsgsecuredgbygthegval
uegofgagparcelgofgrealgestate.
8. Characterg-gcorrectganswerg-
gIsgagmeasuregofgthegwillingnessgofgagborrowergtogmakegon-
timegpayments.gCreditgcharactergisgrevealedgingthegborrower'sgcreditgrep
ort.
9. Capacityg-gcorrectganswerg-
gIsgagmeasuregofgthegborrower'sgabilitygtogrepaygthegdebt,gandgisgdemo
nstratedgthroughgcurrentgearningsgandgjobgstability.
10. Capitalg-gcorrectganswerg-
gIsgthegsumgofgallgassetsgthatgthegborrowerghasgaccumulated.
, P a g e g |g3
11. Collateralg-gcorrectganswerg-
gIsgsomethinggofgvaluegthatgcangbegpledgedgasgsecuritygforgrepay
ment.
12. Yieldg-gcorrectganswerg-
gIsgthegreturngthatgtheginvestorgrecievesgovergtheglifegofgthegloan.g(Alsog
knowngasgprofit)
13. Originatorg-gcorrectganswerg-
gThegprocessgofgcreatinggagnewgmortgagegloan,gincludinggallgstepsgtakeng
bygaglendergtogattractgandgqualifygagborrower.
14. MortgagegBrokerg-gcorrectganswerg-
gTypicallygfunctionsgasgagmiddlemangbetweengthegborrowergandgtheglend
er,gnegotiating,gsellinggorgarranginggloansgtogbegdeliveredgtoglargerginves
tors.gAtgonegtimegoriginatedgupgtog80%gofgallgmortgagegloans.g(Backgongt
hegrise)
15. MortgagegBankerg-gcorrectganswerg-
gEntitiesgwhichgprovidegtheirgowngfundsgforgthegpurposegofgprovidinggmo
rtgagegfinancing,gasgopposedgtogcommercialgbanks/savingsgassociation
s.g(Held,gorg"Warehoused")
16. CorrespondentgLenderg-gcorrectganswerg-
gUsuallygsmallergingscalegthangmortgagegbankersgorgbrokers,gtheseglend
ersgtypicallygextendgloansgwithgtheirgowngfunds,gatgtheirgowngrisk.
, P a g e g |g4
17. Processingg-gcorrectganswerg-
gOncegapplicationgisgcompletegthegfilegmovesgintogthisgphase.
18. Underwritingg-gcorrectganswerg-
gThegdetailedgprocessgofgevaluatinggagborrower'sgloangapplicationgtogdet
erminegthegriskginvolvedgforgtheglender.
19. Closingg-gcorrectganswerg-
gThegconsummationgofgagrealgestategtransactiongingwhichgallgappro
priategdocumentsgaregsignedgandgthegproceedsgofgthegmortgageglo
angaregthengdisbursedgbygtheglender.
20. Servicingg-gcorrectganswerg-
gIncludesgcollectinggmonthlygpayments,gmaintaininggrecordsgofgpayme
ntsgandgbalances,gcollectinggandgpayinggtaxesgandginsuranceg(gandgm
anaginggescrowgandgimpoundgfunds)gremittinggfundsgtogthegnoteghold
er,gandgfollowinggupgongdelinquencies.
21. SupplygandgDemandg-gcorrectganswerg-
gangeconomicgconceptgthatgstatesgthatgthegpricegofgaggoodgrisesgandgfal
lsgdependinggonghowgmanygpeoplegwantgitgandgdependinggonghowgmu
chgofgtheggoodgisgavailable.
22. Fundingg-gcorrectganswerg-
gThegprocessgofgtransferringgfundsgtogagtitlegorgescrowgcompanygforgdisbu
rsement
