MRE_PRACTICE TEST UNITS 17-32 LATEST QUESTIONS AND
VERIFIED ANSWERS
(Unit 17) A building was purchased for $850,000, with 10% down and a loan for the balance. If the
lender charged the buyer two discount points, how much cash did the buyer need at closing if the buyer
incurred no other costs?
A)
$17,000
B)
$85,000
C)
$102,000
D)
$100,300 - CORRECT ANSWER✅✅✅D) The answer is $100,300. A purchase for $850,000 with 10%
down requires a mortgage loan of $765,000 ($850,000 - $85,000 = $765,000). A point is 1% of the loan
amount, or $7,650 (1% × $765,000 = $7,650). The buyer must bring 2 points (2 × $7,650 = $15,300) plus
the down payment ($85,000) to the closing ($15,300 + $ 85,000 = $100,300).
(Unit 17) A buyer purchases a home in an area where closings are traditionally conducted in escrow.
Which item would a buyer deposit with the escrow agent before the closing date?
A)
Title evidence
B)
Estoppel certificate
C)
Cash needed to complete the purchase
D)
Deed to the property - CORRECT ANSWER✅✅✅C) The answer is cash needed to complete the
purchase. The buyer is normally responsible for depositing the cash needed to complete the transaction.
,(Unit 17) A couple listed their home for $237,000. They accepted an offer of $230,000 from a buyer who
is obtaining financing with a $46,000 down payment. The seller has agreed to pay the agent a
commission of 5.5%, which would be
A)
$11,500.
B)
$13,035.
C)
$12,650.
D)
$10,120. - CORRECT ANSWER✅✅✅C) $230,000 × 5.5% (0.055) = $12,650
The answer is $12,650. A couple listed their home for $237,000. They accepted an offer of $230,000
from a buyer who is obtaining financing with a $46,000 down payment. The seller has agreed to pay the
agent a commission of 5.5%, which would be $230,000 × 5.5%, or $12,650.
(Unit 17) A mortgage reduction certificate is executed by a(n)
A)
attorney.
B)
lending institution.
C)
grantor.
D)
abstract company. - CORRECT ANSWER✅✅✅B) The answer is lending institution. A mortgage
reduction certificate, issued by the seller's lender, confirms the balance remaining on a loan to be
assumed as well as the interest rate and the date through which interest has been paid.
(Unit 17) A mortgage servicing transfer statement is executed by
A)
an attorney.
,B)
an abstract company.
C)
a lending institution.
D)
a grantor. - CORRECT ANSWER✅✅✅C) The answer is a lending institution. A mortgage servicing
transfer statement, issued by the seller's lender, tells the borrower whether the lender intends to
service the loan or transfer it to another lender for servicing.
(Unit 17) A survey indicates the location of all improvements located on the premises plus
A)
the identity of the property owner.
B)
any existing easements and encroachments.
C)
the status of property taxes.
D)
any existing liens. - CORRECT ANSWER✅✅✅B) The answer is any existing easements and
encroachments. A survey indicates the location of all improvements located on the premises plus any
existing easements and encroachments.
(Unit 17) All encumbrances and liens shown on the report of title, other than those waived or agreed to
by the purchaser and listed in the contract, must be removed so that the title can be delivered free and
clear. The removal of such encumbrances is typically the duty of the
A)
seller.
B)
title company.
C)
real estate professional.
D)
, buyer. - CORRECT ANSWER✅✅✅A) The answer is seller. Removal of encumbrance is the (financial)
responsibility of the seller.
(Unit 17) At closing, the new loan proceeds would be
A)
prorated between the buyer and the seller.
B)
a credit to the broker.
C)
a credit to the buyer.
D)
a credit to the seller. - CORRECT ANSWER✅✅✅C) The answer is a credit to the buyer. Loan proceeds
are always a credit to the buyer.
(Unit 17) At closing, the principal amount of a purchaser's new mortgage loan is a
A)
credit to the seller.
B)
debit to the seller.
C)
credit to the buyer.
D)
debit to the buyer. - CORRECT ANSWER✅✅✅C) The answer is credit to the buyer. The purchasers
see to it that money is available in the form of a mortgage loan for the purchase of the property. They
are given credit for getting this money to the table.
(Unit 17) At closing, the seller would be credited for
A)
the loan being assumed.
B)
VERIFIED ANSWERS
(Unit 17) A building was purchased for $850,000, with 10% down and a loan for the balance. If the
lender charged the buyer two discount points, how much cash did the buyer need at closing if the buyer
incurred no other costs?
A)
$17,000
B)
$85,000
C)
$102,000
D)
$100,300 - CORRECT ANSWER✅✅✅D) The answer is $100,300. A purchase for $850,000 with 10%
down requires a mortgage loan of $765,000 ($850,000 - $85,000 = $765,000). A point is 1% of the loan
amount, or $7,650 (1% × $765,000 = $7,650). The buyer must bring 2 points (2 × $7,650 = $15,300) plus
the down payment ($85,000) to the closing ($15,300 + $ 85,000 = $100,300).
(Unit 17) A buyer purchases a home in an area where closings are traditionally conducted in escrow.
Which item would a buyer deposit with the escrow agent before the closing date?
A)
Title evidence
B)
Estoppel certificate
C)
Cash needed to complete the purchase
D)
Deed to the property - CORRECT ANSWER✅✅✅C) The answer is cash needed to complete the
purchase. The buyer is normally responsible for depositing the cash needed to complete the transaction.
,(Unit 17) A couple listed their home for $237,000. They accepted an offer of $230,000 from a buyer who
is obtaining financing with a $46,000 down payment. The seller has agreed to pay the agent a
commission of 5.5%, which would be
A)
$11,500.
B)
$13,035.
C)
$12,650.
D)
$10,120. - CORRECT ANSWER✅✅✅C) $230,000 × 5.5% (0.055) = $12,650
The answer is $12,650. A couple listed their home for $237,000. They accepted an offer of $230,000
from a buyer who is obtaining financing with a $46,000 down payment. The seller has agreed to pay the
agent a commission of 5.5%, which would be $230,000 × 5.5%, or $12,650.
(Unit 17) A mortgage reduction certificate is executed by a(n)
A)
attorney.
B)
lending institution.
C)
grantor.
D)
abstract company. - CORRECT ANSWER✅✅✅B) The answer is lending institution. A mortgage
reduction certificate, issued by the seller's lender, confirms the balance remaining on a loan to be
assumed as well as the interest rate and the date through which interest has been paid.
(Unit 17) A mortgage servicing transfer statement is executed by
A)
an attorney.
,B)
an abstract company.
C)
a lending institution.
D)
a grantor. - CORRECT ANSWER✅✅✅C) The answer is a lending institution. A mortgage servicing
transfer statement, issued by the seller's lender, tells the borrower whether the lender intends to
service the loan or transfer it to another lender for servicing.
(Unit 17) A survey indicates the location of all improvements located on the premises plus
A)
the identity of the property owner.
B)
any existing easements and encroachments.
C)
the status of property taxes.
D)
any existing liens. - CORRECT ANSWER✅✅✅B) The answer is any existing easements and
encroachments. A survey indicates the location of all improvements located on the premises plus any
existing easements and encroachments.
(Unit 17) All encumbrances and liens shown on the report of title, other than those waived or agreed to
by the purchaser and listed in the contract, must be removed so that the title can be delivered free and
clear. The removal of such encumbrances is typically the duty of the
A)
seller.
B)
title company.
C)
real estate professional.
D)
, buyer. - CORRECT ANSWER✅✅✅A) The answer is seller. Removal of encumbrance is the (financial)
responsibility of the seller.
(Unit 17) At closing, the new loan proceeds would be
A)
prorated between the buyer and the seller.
B)
a credit to the broker.
C)
a credit to the buyer.
D)
a credit to the seller. - CORRECT ANSWER✅✅✅C) The answer is a credit to the buyer. Loan proceeds
are always a credit to the buyer.
(Unit 17) At closing, the principal amount of a purchaser's new mortgage loan is a
A)
credit to the seller.
B)
debit to the seller.
C)
credit to the buyer.
D)
debit to the buyer. - CORRECT ANSWER✅✅✅C) The answer is credit to the buyer. The purchasers
see to it that money is available in the form of a mortgage loan for the purchase of the property. They
are given credit for getting this money to the table.
(Unit 17) At closing, the seller would be credited for
A)
the loan being assumed.
B)
