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chp 7 second class > chap 12 > Flashcards

chap 12 Flashcards

1
Q

the percentage of a sum of money charged for its use is known as a/an…?
AInterest rate
BDiscount rate
CCharge rate
DUse rate

A

Interest rate

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2
Q

The Federal Reserve System is under the control of the…?
AU.S. President
BCentral Board of Governors
CCongress
DThe House of Representatives

A

Central Board of Governors

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3
Q

Riskier financing demands a higher interest rate…?
AT (True)
BF (False)

A

true

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4
Q

Which of the following is an example of a government sponsored enterprise…?
AFannie Mae
BFreddie Mac
CGinnie Mae
DAll of the above

A

all of the above

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5
Q

The Federal National Mortgage Association is also known as…?
AFarmer Mac
BFreddie Mac
CFannie Mae
DGinnie Mae

A

fannie Mac

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6
Q

The Federal Home Loan Mortgage Corporation is also known as…?
AFarmer Mac
BFreddie Mac
CFannie Mae
DGinnie Mae

A

freddie Mac

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7
Q

The Government National Mortgage Association is also known as…?
AFarmer Mac
BFreddie Mac
CFannie Mae
DGinnie Mae

A

Ginnie Mae

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8
Q

Farmer Mac is primarily responsible for purchasing…?
ACommercial loans
BResidential loans
CAgricultural loans
DInvestment loans

A

Agricultural loans

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9
Q

Which of the following operates in the secondary mortgage market…?
AFannie Mae
BFreddie Mac
CGinnie Mae
DAll of the above

A

All of the above

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10
Q

An institutional lender is not subject to government regulations…?
AT (True)
BF (False)

A

False

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11
Q

Which of the following is an example of an institutional lender…?
ACommercial banks
BCredit unions
CPension funds
DREIT

A

Commercial banks

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12
Q

Which of the following is an acronym that describes the components of a typical monthly mortgage payment…?
APETE
BCADDL
COLD CAR
DPITI

A

PITI

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13
Q

A real estate agent should not provide financial advice to their clients…?
AT (True)
BF (False)

A

True

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14
Q

Seller financing is illegal in California…?
AT (True)
BF (False)

A

False

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15
Q

A mortgage securing a loan made by investors without governmental underwriting is referred to as a…?
AConventional loan
BUnconventional loan
CFHA-insured loan
DStraight loan

A

Conventional loan

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16
Q

The relationship between the amount of a mortgage loan and the lender’s opinion of the value of the property pledged to secure payment of the loan is known as the…?
AFront-end ratio
BBack-end ratio
CLoan-to-value ratio
DLending ratio

A

Loan-to-value ratio

17
Q

A loan made to finance the actual construction or improvement on land is known as a…?
AReverse annuity mortgage
BARM
CConstruction loan
DTerm loan

A

Construction loan

18
Q

The activity of lenders making mortgage loans to individual borrowers occurs in the…?
APrimary mortgage market
BSecondary mortgage market
CStock market
DOpen mortgage market

A

Primary mortgage market

19
Q

Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as…?
AMortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as…?
APrivate mortgage insurance
BPremium mortgage insurance
CHomeowners insurance
DHigh risk mortgage insurance
BPremium mortgage insurance
CHomeowners insurance
DHigh risk mortgage insurance

A

APrivate mortgage insurance

20
Q

Which of the following is an example of a non-institutional lender…?
AREIT
BCredit unions
CPension funds
DAll of the above

A

All of the above

21
Q

A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise, is referred to as a/an…?
AReverse annuity mortgage
BAdjustable rate mortgage
CStraight mortgage
DUnconventional mortgage

A

Adjustable rate mortgage

22
Q

This type of loan is used by older people who need additional income and want to take advantage of the equity in their homes…?
AStraight loan
BUnconventional loan
CReverse annuity mortgage
DAdjustable rate mortgage

A

Reverse annuity mortgage

23
Q

A mortgage in which the interest does not change is known as a…?
AFixed interest mortgage
BTerm loan
CARM
DStraight loan

A

Fixed interest mortgage

24
Q

The Federal Reserve can do which of the following…?
ABuy securities
BChange the discount rate
CCreate higher reserve requirements
DAll of the above

A

All of the above

25
Q

What is the most common loan term for a residential loan…?
A10 year term
B15 year term
C20 year term
D30 year term

A

30 year term

26
Q

Lower interest rates allow more renters to become homeowners…?
AT (True)
BF (False)

A

True

27
Q

The amount of money the borrower or seller must pay the lender to get a mortgage at a stated interest rate is known as…?
ALoan origination fees
BClosing costs
CDiscount points
DReduction costs

A

Discount points

28
Q

When interest rates increase, the sales volume of homes generally…?
ADecreases
BIncreases
CRemains the same
DSales volume is not related to interest rates

A

ADecreases

29
Q

Discount points typically equal a percentage of the loan amount…?
AT (True)
BF (False)

A

true

chp 7 second class (6 decks)

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