Finance

Question 1

An instrument which pledges real property as a collateral for a loan is know as a:

Answer 1

Mortgage

Question 2

A default on a mortgage may be declared by the lender if the mortgagor fails to pay:

Answer 2

Principal and interest

Question 3

A partially amortized loan had a:

Answer 3

Ballon payment

Question 4

A purchase money mortgage is characterized by the fact that:

Answer 4

Title passes at closing

Question 5

The clause in a mortgage which allows the lender to declare the entire balance of the loan due and payable immediately if there is default is referred to as the:

Answer 5

Acceleration clause

Question 6

The right of the property owner to redeem title to real property after a tax sale is called:

Answer 6

Statutory right of redemption

Question 7

Currently, a homeowner who sells his/her home and is not married is entitled to a federal capital gain exemption of up to ______________ every two years.

Answer 7

$250,000

Question 8

The owner’s interest in the value of real property, which is usually reflected as the difference between the market value and the balance due on the mortgage note is called:

Answer 8

Equity

Question 9

In “lien theory” states, at closing, title to real property which has been financed by way of mortgage goes to:

Answer 9

The mortgagor

Question 10

The secondary mortgage market refers to:

Answer 10

Corporations or governmental agencies which buy mortgages

Question 11

An FHA loan:

Answer 11

Is insured by the FHA, but paid for by the buyer.

Question 12

A method of selling real estate whereby the buyer takes possession and pays for the property while the seller retails the title is a:

Answer 12

Land Contract

Question 13

Private mortgage insurance is usually required when:

Answer 13

The loan-to-value ratio exceeds 80%

Question 14

What a buyer assumes an existing mortgage:

Answer 14

He/she takes primary personal responsibility for the debt.

Question 15

Mortgage insurance on an FHA loan is designed to protect the:

Answer 15

Lender

Question 16

Funds for FHA loans are provided by:

Answer 16

Qualified institutional lenders

Question 17

A lender might make an FHA or VA loan rather than conventional loan because of the:

Answer 17

Lower risk

Question 18

If a mortgage specifies a balloon payment:

Answer 18

The final payment is larger than pervious payments.

Question 19

The clause calling the entire balance due and payable if the property is sold is called a(an):

Answer 19

Alienation clause

Question 20

Subordination means to:

Answer 20

Waive priority of a lien to another lender

Question 21

To be valid and enforceable, a mortgage must be:

Answer 21

In writing

Question 22

Alienation clause is also referred to as the:

Answer 22

Due-on-sale clause

Question 23

To obtain a VA loan, it is necessary to have a:

Answer 23

Certificate of eligibility.

Question 24

The purchase of FHA mortgage insurance is:

Answer 24

Required on all FHA loans.

Question 25

The typical mortgage loan that a homebuyer receives from a lender, which is not a guaranteed or insured by the government, is a:

Answer 25

Conventional loan

Question 26

A veteran who has obtained a VA loan from a lender has secured:

Answer 26

A government guaranteed loan.

Question 27

Which of the following types of loans generally involve the highest degree of risk for the lender?

A.) FHA
B.) Construction loan
C.) VA loan
D.) conventional loan

Answer 27

B.) construction loans

Question 28

What is a mortgage loan that requires monthly payments of $213.75 for 20 years and a final payment of $5,350 called?

Answer 28

A ballon mortgage

Question 29

The interest held by a vendee under a contract for deed, installment contract, or land contract is:

Answer 29

Equitable title

Question 30

A statement to a borrower, setting forth the amount of the balance unpaid and the interest rate, is called a/an:

Answer 30

Estoppel certificate

Question 31

The clause in a mortgage that allows the lender to adjust interest is the:

Answer 31

Escalation clause

Question 32

A mortgage that allows for advances to a mortgagor up to a certain maximum is:

Answer 32

An open-end-mortgage

Question 33

The most popular home mortgage loan is:

Answer 33

A conventional loan

Question 34

A secondary money market entity purchases loans at a discount from primary lender. This is known as:

Answer 34

Mortgage warehousing

Question 35

By increasing the amortization period of a load, the:

Answer 35

Monthly payment would decrease

Question 36

What is a characteristic of both FHA and VA loans?

Answer 36

Absence of prepayment penalties

Question 37

With what type of tax is the term “tax shelter” generally associated?

Answer 37

Income

Question 38

What real estate transaction would involve both the buyer and seller being grantors?

Answer 38

An exchange

Question 39

The process of pledging something as security without giving up possession is called:

Answer 39

Hypothecation

Question 40

A government insured loan is:

Answer 40

FHA

Question 41

A government guaranteed loan is:

Answer 41

VA

Question 42

A mortgage loan that places a lien on more than one parcel of land is a:

Answer 42

Blanket mortgage

Question 43

A mortgage loan that includes both the house and the furniture would be a:

Answer 43

Package mortgage

Question 44

The act that requires a credit bureau to give one the right to inspect information in his/her file and correct any errors is known as the:

Answer 44

Fair credit reporting act.

Question 45

The national consumer credit protection act is also know. As:

Answer 45

The truth and lending act

Question 46

The act covered by regulation Z applies to:

Answer 46

Only creditors who regularly extend credit and only advertising promoting credit.