Real Estate Vocabulary Exam I

Question 1

Which of the following describes the term “appreciation”?

Answer 1

Appreciation is the increase in the value of a property due to
changes in market conditions, inflation, or other causes.

Question 2

When ownership of a mortgage is transferred from one company or individual to another, it is called

Answer 2

When ownership of a mortgage is transferred (assigned) from one
company or individual to another, it is called an assignment.

Question 3

A mortgage loan which requires the remaining balance be paid at a specific
point in time is called a/an

Answer 3

A mortgage loan that requires the remaining principal balance be
paid at a specific point in time is a balloon mortgage.

Question 4

The following reason accounts for why bridge loans are not used much any-
more:

Answer 4

More second mortgage lenders now will lend at a high loan to value
Sellers would rather accept offers from Buyers who have already sold their
property

Question 5

A title which is free of liens or legal questions as to ownership of the property
is called a __________ title.

Answer 5

clear

Question 6

What is the collateral in a home loan?

Answer 6

The property itself

Question 7

The adjustment date on an adjustable-rate mortgage is

Answer 7

the date the interest rate changes

Question 8

What is the deposit made by a potential buyer to show he is serious about
buying a house called?

Answer 8

Earnest money deposit

Question 9

A right-of-way which gives persons other than the owner access to or over a
property is known as an

Answer 9

easement

Question 10

Which best describes a “subdivision”?

Answer 10

A housing development created by dividing a tract of land into individual
lots

Question 11

When someone contributes to the construction or rehabil-
itation of a property with labor or services rather than cash, that
contribution is called

Answer 11

sweat equity

Question 12

A two-step mortgage is defined as

Answer 12

an adjustable rate mortgage with one interest rate for the

first five or seven years and a different rate for the remainder of the term.

Question 13

A legal document evidencing a person’s right to or owner-

ship of a property is called a

Answer 13

A title is a legal document evidencing a person’s

right to or ownership of a property.

Question 14

A title is a legal document evidencing a person’s

right to or ownership of a property.

Answer 14

bill of sale
A bill of sale is a written document that transfers
personal property from one owner to another.

Question 15

An oral or written agreement that is binding in a court of law
is called a

Answer 15

contract
A contract can be oral or written and is binding in a
court of law.

Question 16

The part of the purchase price of a property that the buyer
pays in cash and does not finance with the mortgage is called
the

Answer 16

down payment
The down payment is the amount paid down in
cash as the initial upfront portion of the total amount due. It is
usually given in cash at the time of finalizing the transaction.

Question 17

A female named in a will to administer an estate is called an

Answer 17

executrix
The female executor named in a will to administer
an estate is called an executrix.

Question 18

The greatest possible interest a person can have in real estate is called

Answer 18

fee simple

Question 19

Required for properties located in federally designated flood
areas, this type of insurance compensates for physical property
damage resulting from flooding. It is called

Answer 19

flood insurance

Question 20

The following is true of a government loan:

Answer 20

Government loans are either insured by FHA, guar-
anteed by VA or RHS. Mortgages that are not government loans
are called conventional loans.

Question 21

The person conveying an interest in real property is called

Answer 21

the grantor