Finance And Appraisal Flashcards
An appraiser who is using the sales comparison approach to value would NOT use which of the following similar homes as a comparable property? One that was
- old by the owners who were undergoing a foreclosure. - The sales comparison approach would use recently sold properties in a competitive market under normal terms and conditions. A foreclosure sale has special circumstances that would affect value…
The period of time through which a real property gives benefits to its owner is BEST described as:
- economic life
- Economic life is the time frame an improvement will add to value.
Capitalization is a process used to:
- convert income into value
- Capitalization is the process for estimating value using a rate of return on the investment. NOI = rate x value.
The economic life of a building has come to an end when the:
- value of the land and the building equals the value of the land only
- The improvements cease to add value to the property.
An appraiser often makes a distinction between the physical life and the economic life of an improvement. Regarding these two ways to measure “life,” which is generally true?
- Economic life ceases first
- Economic life is when an improvement stops adding value to the property regardless of the physical life
Examples of deductible expenses on an owner’s tax return for a vacation home are all of the following EXCEPT:
mortgage principal
If a broker exchanges a real property listed by a co-broker with a real property she has listed, under the usual cooperating situation the broker:
- receives two sales commissions
- The broker has an interest on each side of the transaction.
The VA is authorized to make direct loans:
- in a rural area where the veteran cannot find a lender to lend at rates of interest competitive with those in other areas
- in a rural area where the veteran cannot find a lender to lend at rates of interest competitive with those in other areas
A veteran who sells his house and permits the buyer to assume his VA loan:
- Has no further liability if he obtains a novation from the VA The veteran can receive a release of liability if the buyer assumes all liability for the loan.
- And the lender approves the buyer for the assumption.
An FHA lender will allow all of the following EXCEPT :
- Seller to pay all costs for the buyer, including down payment
- FHA will limit lender fees and specify how closing costs and down payment may be paid and by whom.
Discount charges charged on a loan result in:
- higher yield to the lender
- The number of points charged will depend on the interest rate and the yield required by the lender and the length of the loan.
What is a margin:
- A premium
- A premium added to the rate to pay for the lenders cost to facilitate the loan
LaShawn has just made the final payment on her home mortgage to her lender. There will still be a lien on her property until the lender records a(n)
- satisfaction of mortgage.
- The satisfaction of mortgage acknowledges the debt is paid in full. It will be recorded in the public record for future title searches
A person who assumes an existing mortgage loan is
- personally responsible for paying the principal balance. When one assumes a loan, they become responsible for all of the liability with the loan
A ‘‘friendly foreclosure’’ enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by use of a(n)
- deed in lieu of foreclosure.
- The borrower will voluntarily transfer the property to the lender in lieu of or instead of foreclosure.
The pledging of property as security for payment of a loan without surrendering possession is
hypothecation.
In absence of an agreement to the contrary, the mortgage having priority will be the one
- which was recorded first.
- First in time first right.
- Priority is set by recording date except property taxes are paid first
The type of real estate loan that allows the lender to increase the outstanding balance of a loan up to the original sum in the note while advancing additional funds is the
- open-end mortgage.
- An open ended mortgage allows the borrower to draw future advancements on a set amount agreed to by the parties.
Private mortgage insurance (PMI) is often used by borrowers whose loan-to-value (LTV) ratio is less than 20 percent. Lenders must cease charging PMI when the LTV reaches
- 22 percent.
Which of the following would be considered a trigger item under Regulation Z?
- Only $10,000 down”
- Any term such as monthly payments, rates down payment that are advertized will trigger full disclosure. Vague references will not trigger disclosure. Low down payment.
John is selling his property for $225,000. He has a loan balance of $50,000. He has agreed to provide financing to the purchasers in the amount of $200,000 and will continue to make payments on the original loan. This type of loan is called a
- wraparound loan.
- Seller financing is wrapped around an existing debt.
Mrs. Robinson has owned her house for over 50 years. It has fallen into disrepair, but because she lives on a fixed income, she does not have the money to make the needed repairs. She has a considerable amount of equity in the house. What type of loan best suits her needs?
A reverse annuity mortgage A loan which the owner receives a line of credit based on the equity of the property.
The type of loan that will MOST likely have the lowest loan-to-value ratio is a
conventional loan. A conventional loan typically requires a larger down payment.
