Texas Real Estate Finance Practice Exam
Questions With Correct Answers
Which of the following default types would be considered a technical default? -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-failure to keep property in good repair
| | | | | | |
Which Texas agency licenses, regulates, and examines the trust- and insurance-
| | | | | | | | | |
funded prepaid funeral contract sellers? - CORRECT ANSWER✔✔-TExas
| | | | | | | |
department of banking | |
The Tax Reform Act of 1986 established an entity that can issue multiclass
| | | | | | | | | | | | |
securities. What is this entity called? - CORRECT ANSWER✔✔-REMIC
| | | | | | | |
What is the main advantage of a single-family home investment over other real
| | | | | | | | | | | | |
estate investments? - CORRECT ANSWER✔✔-liquidity
| | | |
Who is the person who grants approval for the loan, rejects the loan, or in some
| | | | | | | | | | | | | | | |
cases, agrees to approve the loan if certain conditions are met? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-underwriter
Which of the following statements is not true about a note? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-a note must be tied to a mortgage to be legal | | | | | | | | | |
What percent of the REIT's assets must be made up of cash, real estate, mortgage
| | | | | | | | | | | | | |
notes, or government securities? - CORRECT ANSWER✔✔-75
| | | | | | |
, Mary is getting a $120,000 loan at 6.5 percent and will pay 3 discount points.
| | | | | | | | | | | | | | |
What will the effective interest rate be? - CORRECT ANSWER✔✔-.06875
| | | | | | | | |
How is the payoff of a construction loan normally accomplished? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-with a takeout loan | | |
Which type of property is most benefited by the income capitalization approach
| | | | | | | | | | | |
to estimating value? - CORRECT ANSWER✔✔-apartment building
| | | | | |
Which statement is not true about the Farm Credit System? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-FCS banks lend money from their deposits | | | | | |
In Texas, what is the maximum late payment penalty allowed? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-no restrictions |
With which kind of lease does the tenant not know the actual change in the rent
| | | | | | | | | | | | | | | |
amount in advance? - CORRECT ANSWER✔✔-indexed
| | | | |
What is the term used for an agreement between the borrower and a permanent
| | | | | | | | | | | | |
lender relative to future delivery of a takeout loan upon completion of
| | | | | | | | | | | | |
construction? - CORRECT ANSWER✔✔-take-out commitment | | | |
Alex bought a property valued at $850,000 which has an annual net operating
| | | | | | | | | | | | |
income of $102,500. What is the capitalization rate? - CORRECT ANSWER✔✔-.12
| | | | | | | | | |
Questions With Correct Answers
Which of the following default types would be considered a technical default? -
| | | | | | | | | | | | |
CORRECT ANSWER✔✔-failure to keep property in good repair
| | | | | | |
Which Texas agency licenses, regulates, and examines the trust- and insurance-
| | | | | | | | | |
funded prepaid funeral contract sellers? - CORRECT ANSWER✔✔-TExas
| | | | | | | |
department of banking | |
The Tax Reform Act of 1986 established an entity that can issue multiclass
| | | | | | | | | | | | |
securities. What is this entity called? - CORRECT ANSWER✔✔-REMIC
| | | | | | | |
What is the main advantage of a single-family home investment over other real
| | | | | | | | | | | | |
estate investments? - CORRECT ANSWER✔✔-liquidity
| | | |
Who is the person who grants approval for the loan, rejects the loan, or in some
| | | | | | | | | | | | | | | |
cases, agrees to approve the loan if certain conditions are met? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-underwriter
Which of the following statements is not true about a note? - CORRECT
| | | | | | | | | | | | |
ANSWER✔✔-a note must be tied to a mortgage to be legal | | | | | | | | | |
What percent of the REIT's assets must be made up of cash, real estate, mortgage
| | | | | | | | | | | | | |
notes, or government securities? - CORRECT ANSWER✔✔-75
| | | | | | |
, Mary is getting a $120,000 loan at 6.5 percent and will pay 3 discount points.
| | | | | | | | | | | | | | |
What will the effective interest rate be? - CORRECT ANSWER✔✔-.06875
| | | | | | | | |
How is the payoff of a construction loan normally accomplished? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-with a takeout loan | | |
Which type of property is most benefited by the income capitalization approach
| | | | | | | | | | | |
to estimating value? - CORRECT ANSWER✔✔-apartment building
| | | | | |
Which statement is not true about the Farm Credit System? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-FCS banks lend money from their deposits | | | | | |
In Texas, what is the maximum late payment penalty allowed? - CORRECT
| | | | | | | | | | | |
ANSWER✔✔-no restrictions |
With which kind of lease does the tenant not know the actual change in the rent
| | | | | | | | | | | | | | | |
amount in advance? - CORRECT ANSWER✔✔-indexed
| | | | |
What is the term used for an agreement between the borrower and a permanent
| | | | | | | | | | | | |
lender relative to future delivery of a takeout loan upon completion of
| | | | | | | | | | | | |
construction? - CORRECT ANSWER✔✔-take-out commitment | | | |
Alex bought a property valued at $850,000 which has an annual net operating
| | | | | | | | | | | | |
income of $102,500. What is the capitalization rate? - CORRECT ANSWER✔✔-.12
| | | | | | | | | |
