Course Exam Review

Question 1

True or False:

**PMI goes with Conventional Loans and MIP goes with FHA loans?

Answer 1

TRUE

Question 2

PMI

Answer 2

Private Mortgage Insurance- Conventional Loans - Only if you put less than 20% down

Question 3

MIP

Answer 3

Mortgage Insurance Premium- FHA Loans ( doesn’t go away)

Question 4

A formal assessment of value:

Answer 4

An Appraisal

Question 5

Informal assessment of value?

Answer 5

CMA or BPO

Question 6

True Or False:

Market Value is and ESTIMATE of Value. Market Price is a FACT.

Answer 6

TRUE

Question 7

Market Value

Answer 7

An opinion of value, an ESTIMATE. ( Ex: Appraisals, CMA’s, BPO’s)

Question 8

Market Price

Answer 8

FACTS. What homes have actually sold for.

Question 9

The process of combining two lots together:

Answer 9

Assemblage

Question 10

Pottage

Answer 10

RESULT or VALUE of combining (assemblage) two lots together.

Question 11

Which survey system uses monuments and benchmarks?

Answer 11

Metes and Bounds

Question 12

MONUMENTS ON A SURVEY

Answer 12

Tress, rocks, and other things you are describing as you walk the property.

Question 13

Benchmark- Survey Metes and Bounds

Answer 13

Starting point of the survey

Question 14

3 Approaches of Value used by appraisers

Answer 14

1. Cost Approach
2. Income Approach
3. Sales Comparison Approach

Question 15

Sales Comparison Approach

Answer 15

Used by Appraisers on 1-4 Family Properties & Land

Question 16

Cost Approach

Answer 16

Used by Appraisers if their are no Comps.
** ONLY approach where the Appraiser uses depreciation. **

Question 17

Income Approach

Answer 17

Used if property is bringing in Income ( 5 units or more)

Question 18

3 types of Depreciation:

Answer 18

Physical, Functional, Economical

Question 19

Physical Depreciation

Answer 19

Normal wear and tear

Question 20

Economical Depreciation

Answer 20

Factors outside of the property bringing the value down

Question 21

Functional Obsolescence Depreciation

Answer 21

Old fashion- out of style

Question 22

Escrow Agent

Answer 22

The entity that is holding escrow money ; EX: title company or Attorney

Question 23

Truth in Lending laws were created to protect:

Answer 23

Consumers

Question 24

Fannie Mae is known as:

Answer 24

Federal National Mortgage Association

Question 25

PITI

Answer 25

Principal, Interest, Taxes, Insurance

Question 26

Formula for the COST METHOD appraisers use is:

Answer 26

Land + New Construction Cost- Depreciation

Question 27

The Trustee in a Deed of Trust will:

Answer 27

Foreclose on the property in the event of default

Question 28

Deed of Trust:

Answer 28

Mortgage; Includes the Mortgagee (Lender), the mortgagor (Borrower), the trustee (entity for foreclosure/ release lien once paid in full)

Question 29

The right to redeem a property after a mortgage foreclosure is called:

Answer 29

Equitable Redemption

Question 30

Statutory Redemption:

Answer 30

Tax Foreclosure ( 2 years if you have filed your homestead/ 6 months if no homestead)

Question 31

Last step for a valid Deed:

Answer 31

Delivery and Acceptance

Question 32

Who signs the deed?

Answer 32

The Grantor (Owner) .. The Grantee (buyer) DOES NOT sign the deed

Question 33

A mortgage that contains personal property?

Answer 33

Package Mortgage

Question 34

Blanket Mortgage:

Answer 34

Mortgage that covers more than one property

Question 35

Mortgage Banker

Answer 35

Originates, in- house, can sometimes sell

Question 36

Mortgage Broker:

Answer 36

Middle man; sell your mortgage on secondary mortgage market;

Question 37

Due on Sale Clause:

Answer 37

Alienation

Question 38

Acceleration Clause:

Answer 38

Upon a certain event the whole note is Due.

Question 39

A. Leasehold Estate is the Same as a :

Answer 39

A Non- Freehold Estate

Question 40

A definite start date and end date defines this kind of lease:

Answer 40

Estate for Years