Financing Flashcards
In a land contract or contract for deed, the seller who retains the fee simple title is referred to as the: A » optionor B » optionee C » vendee D » vendor
D » vendor
A buyer wanted to purchase a property from a seller and assume the FHA loan on the property. The buyer, however, did not have enough money to assume the loan and make the down payment on the property. The buyer agreed to make equal monthly payments to the seller for one year for the down payment. This type of financing would be called a: A » shared appreciation mortgage B » package mortgage C » reverse annuity mortgage D » contract for deed
D » contract for deed
In a contract for deed, when does the buyer receive the deed to the property?
A » When the contract is signed
B » When the deed is recorded
C » When the contract is recorded
D » When the payment obligation is paid in full
D » When the payment obligation is paid in full
Usury laws are designed to protect the: A » seller B » broker C » lender D » borrower
D » borrower
A person was applying for a new VA loan on a single family home purchase. Which federal law was passed to ensure the buyer received disclosure of the total closing costs?
A » Truth-In-Lending Laws (Regulation Z)
B » The Equal Credit Opportunity Act
C » Usury laws
D » The TILA-RESPA Integrated Disclosure Rules (TRID)
D » The TILA-RESPA Integrated Disclosure Rules (TRID)
Which of the following loans would fall under the three-day right of rescission allowed under Regulation Z?
A » A residential loan for a first mortgage
B » A loan for a commercial property
C » A loan for an agricultural property
D » A home improvement loan for a principal residence
D » A home improvement loan for a principal residence
Which of the following best describes a term loan?
(C) In a term loan, the borrower keeps the principal amount of the loan for the entire term; thus paying interest only during the term of the loan and paying the loan off in a balloon payment at the end. (A) In a reverse annuity mortgage the lender pays monthly payments to an owner (usually older) and then is repaid at some future date. (B) In an amortized loan, the borrower pays both the (D) interest and the principal during the term of the loan.
C » Interest only
The right of a person to regain title to property after paying all debts is known as: A » release B » reversion C » remainder D » redemption
D » redemption
An escrow or impound account for the lender is for holding: A » title insurance payments B » prepaid taxes and insurance C » discount point payments D » mortgage payments
B » prepaid taxes and insurance
A buyer was going to take over on a seller's existing loan as part of the real estate transaction. The lender, however, was going to change the interest rate on the buyer to the prevailing current rate. In order for the lender to do this, there must have been what type of clause in the mortgage? A » acceleration B » alienation C » defeasance D » subordination
B » alienation
A mortgage provision that gives the lender the right to call the balance due upon cause (such as non-payment) is called: A » anticipation B » alienation C » acceleration D » defeasance
C » acceleration
What is an advantage for a borrower who chooses to pay private mortgage insurance (PMI) in receiving a loan?
A » The insurance is tax deductible
B » The borrower can purchase with a lower down payment
C » The borrower receives a lower interest rate
D » The borrower only pays this one time at closing
B » The borrower can purchase with a lower down payment
A blanket mortgage usually contains which of the following clauses? A » Escalation B » Subordination C » Release D » Subrogation
C » Release
A buyer who had insufficient funds for a down payment gave a note and mortgage to the seller for the difference. This is BEST referred to as: A » wraparound mortgage B » open end mortgage C » purchase money mortgage D » package mortgage
C » purchase money mortgage
