Unit 15 Real Estate Financing: Practices Flashcards
Which of the following defines the secondary mortgage market?
A Markets in which loans are bought and sold after they have been originated
B Lenders that deal exclusively in second mortgages
C Markets in which loans are originated
D Lenders that offer VA and FHA financing
A Markets in which loans are bought and sold after they have been originated
The buyers purchased a residence for $95,000. They made a down payment of $15,000. The buyers financed the remaining $80,000 of the purchase price by executing a mortgage and note to the seller. This type of loan is called a A purchase money mortgage. B package mortgage. C balloon mortgage. D term mortgage.
A purchase money mortgage.
Which of the following statement(s) is/are TRUE about private mortgage insurance?
I Conventional lenders will usually require it on any loan over 80% LTV.
II It can be discontinued when the borrower’s equity in the home exceeds 20% if he or she is current on the loan payments.
A I only
B II only
C Both I and II
D Neither I nor II
C Both I and II
A borrower obtains a line of credit to make repairs on her home. The mortgage document secures the maximum amount of funds to be used for the current home repairs as well as any future funds to be advanced to the borrower by the lender. This borrower has obtained A an open-end mortgage. B a package loan. C a blanket contract. D a reverse mortgage.
A an open-end mortgage.
Regulation Z requires that lenders
A properly inform buyers and sellers of commercial property of all settlement costs in a real estate transaction.
B inform prospective borrowers of all charges, fees, and interest involved in making a home mortgage loan.
C not discriminate in the lending of credit based on protected class.
D study the economic market before they decide what interest rate to charge on residential mortgages.
B inform prospective borrowers of all charges, fees, and interest involved in making a home mortgage loan.
A veteran’s VA entitlement can be restored
A by letting a nonveteran assume the current VA home loan.
B once the equity in the property exceeds 25% of the market value.
C by selling the property to a qualified veteran.
D by paying off the original VA loan that was secured by the entitlement.
D by paying off the original VA loan that was secured by the entitlement.
An elderly woman continues to live in the home she purchased 40 years ago, but she now receives monthly loan installment checks from her mortgage lender thanks to her A shared-appreciation mortgage. B adjustable-rate mortgage. C reverse mortgage. D USDA loan.
C reverse mortgage.
The buyers are purchasing an ocean-front summer home in a new resort development. The house is completely furnished, and the buyers have obtained a mortgage loan that covers the purchase price of the residence, including furnishings and appliances. This kind of financing is called a A construction loan. B package loan. C blanket loan. D home equity loan.
B package loan.
Bridge loans are A used to pay for personal property. B short-term interim financing. C always adjustable-rate loans. D funded by the VA.
B short-term interim financing.
A developer received a loan that covers five parcels of real estate and provides for the release of the mortgage lien on each parcel when certain payments are made on the loan. This type of loan arrangement is called A a construction loan. B a blanket loan. C a package loan. D an open-end loan.
B a blanket loan.
Funds for Federal Housing Administration (FHA) loans are usually provided by A the FHA. B the FDIC. C qualified lenders. D FNMA.
C qualified lenders.
Under the provisions of the Truth in Lending Act (Regulation Z), the annual percentage rate (APR) of a finance charge does NOT include A discount points. B title preparation fees. C loan origination fee. D loan interest rate.
B title preparation fees.
Which of the following is NOT a participant in the secondary market? A FHLMC B GNMA C FNMA D RESPA
D RESPA
All the following statements about junior mortgages are true EXCEPT,
A “their interest rates are usually higher than rates charged on first mortgages.”
B “they are always purchase money mortgages.”
C “they are more subject to default than first mortgages.”
D “they are usually for a shorter term than first mortgages.”
B “they are always purchase money mortgages.”
All of the following financing information statements are trigger terms under Regulation Z of the Truth in Lending Act EXCEPT,
A “great assumable low interest rate loan.”
B “only $500 down and $750 a month.”
C “FHA loan at 5% annual interest.”
D “easy qualifying on this 30-year loan.”
A “great assumable low interest rate loan.”