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Real Estate Exam > Class 13 > Flashcards

Class 13 Flashcards

1
Q

A loan guaranteed by the government

A

VA loan

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2
Q

A fee paid by veterans for the VA loan

A

Funding fee

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3
Q

An organization that buys rural property

A

Farmer mac

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4
Q

Private mortgage insurance

A

PMI

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5
Q

An organization that buys and sells mortgages

A

Fannie may

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6
Q

A trigger item in an advertisement

A

down payment

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7
Q

Also known as Regulation Z

A

Truth in lending

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8
Q

A morgage that includes real property and personal property

A

Package mortgage

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9
Q

Annual percentage Rate

A

APR

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10
Q

The practice of refusing to make loans in certain areas

A

redlining

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11
Q

What organization would be involved in the government backing of securities sold to investors

A

Ginnie Mae

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12
Q

A non-conforming loan can be best described as a loan that….

A

does not meet the qualifications of the secondary market

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13
Q

A young married couple applied for an FHA loan at the local lending institution and discovered that FHA loans….

A

require the property to be owner-occupied

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14
Q

What type of mortgage would be involved if a lender required more than one tract of land to be covered under one security agreement

A

A blanket mortgage

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15
Q

The party who is most likely to benefit from the FHA loan is the

A

Lender

**FHA loans protects lenders

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16
Q

A loan commitment specified that a lender would make a $120,000 loan which includes the purchase of all appliances for use in the home. What type of mortgage will the lender require to finance the real and personal property?

A

A package mortgage

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17
Q

What type of loan would require the purchase of PMI insurance

A

conventional loan

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18
Q

Benefits that may accrue to a seller under a sale-leaseback agreement would include

A

Raising equity capital
Deductibility of rent
Deductibility of real estate taxes

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19
Q

A borrower who is refinancing his home has been told by the lender that he has 3 business days to change his mind about the loan once the lender has made the loan commitment. What law regulates this right of rescission?

A

Regulation Z - Truth in Lending

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20
Q

An all inclusive mortgage that is written as a junior loan which as one payment that covers two loans would be an example of what type of mortgage

A

A wrap around mortgage

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21
Q

What veterans do NOT have to pay the funding fee for a VA loan?

A

Veterans with service connected disability do not have to pay the funding fee

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22
Q

What in an advertisement for the sale of a single family home would be a “trigger term” that would require full disclosure under the Truth-in-Lending act?

A

Down payment

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23
Q

The buyers purchased a residence of $395,000, made a downpayment of $70,000 and obtained a loan for the balance. The loan is a….

A

purchase money mortgage

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24
Q

What are the three participants in the secondary mortgage market?

A

Fannie Mae
Freddie Mac
Ginnie Mae

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25
Q

One of the federal laws requiring disclosure to a loan applicant who is rejected for a loan on the basis of a credit report is…

A

The fair credit reporting act

26
Q

The conservatorship of Fannie Mae and Freddie Mac is the responsibility of…

A

the Federal Housing Finance Agency

27
Q

A developer receives a loan that covers five parcels of real esate and provides for the release of the mortgage lien on each parcel when certain payments are made on the loan. This type of loan arrangement is called…

A

the blanket loan

28
Q

Funds for FHA-insured loans are usually provided by….

A

approved lenders

**FHA loans are not made by FHA, they are INSURED by FHA

29
Q

What does Regulation Z require to be disclosed

A

discount points
loan origination fee
interest rate

30
Q

what is the positio of home equity line of credit in relation to the original lien?

A

Junior

31
Q

The buyers purchased a model home and all its furnishings and appliances by using a….

A

package loan

32
Q

The primary activity on Freddie Mac is to…

A

buy and pool blocks of conventional mortgages

33
Q

The federal Equal Credit Opportunity Act allows lenders to discriminate against potential borrowers on the basis of….

A

income

34
Q

The buyers of a residence of Summerset have a mortgage that allows them to borrow additional funds that will be secured by the home at any time. The have what kind of loan?

A

open-end loan

35
Q

Programs to help families purchase or operate family farms are provided by….

A

The Farm Service Agency

36
Q

The document that sets forth the maximum loan guaranteed to which a veteran is entitled is the…

A

certificate of eligibility

37
Q

The law that requires lenders to find ways to help meet the housing needs of those of low and moderate incomes is

A

the community reinvestment act

38
Q

FHA ____________ loans

VA ____________ loan

A

FHA insures

VA guarantees

39
Q

The standard conventional loan has an ____ % loan-to-value ratio

A

89%

40
Q

When loan to value ratios exceed 85%, the risk increases for the __________.

A

lender

41
Q

PMI protects a __________ against default and is normally required on conventional loans that exceed 80%

A

lender

42
Q

What does the FHA require

A

That the house meets a minimum standard for habitability
must be owner-occupied
Determines the max mortgage they will ensure

43
Q

FHA loan can only be used on what type of property

A

1-4 single family units

NO COMMERCIAL

44
Q

Under the 203 B-1 program for FHA loans, the borrower must contribute a minimum of _____% towards the purchase of the property

A

3.5%

45
Q

FHA _____ have prepayment penalties (does/does not)

A

does NOT

**but cannot contribute more than 6% of the sale price

46
Q

One of the benefits of the VA loan is the avaiabilit of 100% financing. A lender will normally make a 100% loan up to ___ x the guaranty. A ______ states the amount of guaranty a veteran is entitled to

A

4 times

certificate of eligibility

47
Q

VA loans are for owner-occupied residential only and can be used for….

A

to build
refinance
improve a home

48
Q

Note: closing costs cannot be included in the VA loan. and anyone may pay discount points

A
49
Q

Explain what loan assumption is

A

taking over someone elses loan. But the first borrower is still on the hook for the second’s actions.

A non-veteran can assume a veteran’s VA loan but must qualify

50
Q

An open ended mortgage is a ________

A

line of credit

51
Q

Under a sale leaseback, a property owner sells the property and agrees to lease it back at the same time. The seller becomes a tenant and the buyer becomes a landlord.

  • what are the advantages for the seller?
  • what are the advantages for the buyer?
A

For the seller: tax deductions, rent deductions, raise equity capital

For the buyer: immediate return on investment

52
Q

What are the finance fees charged by a lender?

A 
interest
origination fee
finder's fee
service fees
discount points
53
Q

Discount point are charged to increase a __________ yield

A

Lender’s yield

54
Q

Both origination fees and discount points are charged as a percentage of….

A

the loan amount

55
Q

As a general rule, a lender’s yield increases ____% for each point charged on a 30 year loan.

A

1/8 %

56
Q

What fees are NOT considered finance fees and not included in the APR?

A 
title fees
appraisal fees
survey fees
attorney fees
credit report fees 
application fees
57
Q

What rate includes all your finance fees and is the rate that expresses the relationship between the total finance charges the total loan amount?

A

APR

58
Q

Right of Recission: A consumer who refinances his property has ___ business days to rescind his agreement with the lender. The right of recission does not apply to loans to purchase property

A

3 business days

59
Q

Real estate licensees must comply with ________ when advertising finance terms. Finance terms called “Trigger Items” place din an ad require full disclosure of all finance terms. Included in trigger items are:

A

Truth in Lending

down payment
number of payments
loan term
amount of payment
finance charge
60
Q

Full disclosure requires an ad to contain the:

A

down payment
terms of repayment
APR

61
Q

What federal law requires lenders to disclose the number of loan applications and loans made in their service area, hence eliminating redlining?

A

Home Mortgage Disclosure Act

Real Estate Exam (19 decks)

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