Real Estate Practice Exam 4 Questions With Complete Solutions
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Course
Real Estate
Institution
Real Estate
A VA loan may be granted for the purchase of a one-family to four-family property if: correct answer: A: The veteran agrees to live there.
Illumination:
Although the rules and terms can fluctuate, the low down payment and below market interest features of VA loans come with the condition that ...
real estate practice exam 4 questions with complet
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Real Estate Practice Exam 4 Questions With
Complete Solutions
A VA loan may be granted for the purchase of a one-family to
four-family property if: correct answer: A: The veteran agrees
to live there.
Illumination:
Although the rules and terms can fluctuate, the low down
payment and below market interest features of VA loans come
with the condition that the borrower live in the property.
Which of the following would usually occur in a sale-and-
leaseback transaction? correct answer: A: The property is sold
on the condition that the new owner lease it back to the seller at
the time title passes.
Illumination:
A sale-leaseback is usually used for the purpose of creating cash
flow from a commercial property. As the name implies, the
owner transfers title to the buyer in exchange for cash, then
leases the property back at a monthly rate while continuing to
run his business from that location or otherwise use the property.
A standardized yardstick expressing the true annual cost of
borrowing is expressed as the what? correct answer: A: APR
Illumination:
,APR stands for "Annual Percentage Rate" and expresses the true
cost of the loan by factoring fees such as points, recording fees,
appraisal fees and such into the interest rate. For example, a
mortgage that showed an interest rate of 4.85% on the
promissory note might have an APR of 5% when associated
costs are factored in.
RESPA would prohibit which of the following acts? correct
answer: A: paying of kickbacks
Illumination:
RESPA concerns itself only with educating consumers about the
true costs of borrowing and standardizing lending practices. As
such, referral "fees" are prohibited.
In most states, by paying the debt after a foreclosure sale, the
mortgagor has the right to regain the property. What is this right
called? correct answer: A: statutory right of redemption
Illumination:
This right of redemption is called "statutory" because it is
legally mandated by law, as opposed to a custom lenders could
follow or not at their option.
The lender is required, under RESPA, to provide a detailed
"GOOD FAITH ESTIMATE" statement at the time of loan
application or within three business days to: correct answer: A:
the buyer.
Illumination:
, The "good faith" part of this requirement is the key element to
consumers. By standardizing the forms and disclosures used by
lenders, borrowers are no longer surprised by substantial and
hidden costs at the time of closing.
In which of the following markets may a lender sell a loan that a
mortgage banker has previously originated? correct answer: A:
secondary market
Illumination:
Many homeowners are surprised the first time they receive a
letter from a lender they've never heard of informing them that
they now hold the mortgage on their home and that future
payments should be sent to them. This secondary market is
where lenders buy and sell mortgages to balance their portfolios
according to market conditions and their internal needs and
objectives. It should be noted that the terms of mortgages bought
and sold cannot be changed by the new note holders.
Which of the following is considered a conventional loan?
correct answer: A: commercial bank's ARM loan
Illumination:
Once considered a form of creative financing, ARMs are now
standard, conventional loans. Options A and B are part of
various government programs to help low and moderate income
families as well as veterans find affordable home financing.
Under an FHA graduated payment mortgage, which of the
following fluctuates over the term of the loan? correct answer:
A: monthly payments
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