Finance - Review Exam (Bob Brooks) with Complete Answers
Discount Points are figured on the:
a. Selling Price
b. Loan Balance
c. Salary of buyer
d. None of the above. - ANSWER-b. Loan Balance
Which of the following is shown on an estoppel certificate?
a. Unpaid balance and interest rate on mortgage. b. Time of foreclosure
c. Novation of the seller.
d. Any defects in the title. - ANSWER-a. Unpaid balance and interest rate on mortgage.
Insurance on an FHA loan is designed to protect the:
a. Government
b. Lender c. Borrower
d. Seller - ANSWER-b. Lender
If given the choice, it's best if the Buyer assumes an existing loan:
a. Assumption of
b. Subject to
c. Buy Down
d. None of the above. - ANSWER-b. Subject to
Two discount points charged on an FHA loan of $50,000 would amount to:
a. $500
b. $700
c. $1,000 d. $2,000 - ANSWER-c. $1,000
To compute the dollar value of a loan discount, each point is equal to:
a. 1% of the amount to be loaned.
b. 1% of the down payment. c. 1% of the appraised value.
d. 1% of the sales price. - ANSWER-a. 1% of the amount to be loaned.
The document from a lender that gives the status of the loan such as loan balance, interest, time remaining and note is the:
a. Loan certificate
b. Estoppel certificate
c. Equity certificate
d. Mortgage certificate - ANSWER-b. Estoppel certificate
PMI is required when a Buyer pays less then _____ % Down.
a. 5%
b. 10%
c. 20%
d. 25% - ANSWER-c. 20%
A buyer could have a deficiency judgment entered against him when he:
a. Purchases with an "assumption of" the mortgage b. Buys "subject to" a mortgage
c. Pays off the loan.
d. All of the above. - ANSWER-a. Purchases with an "assumption of" the mortgage
The Smiths own their house free and clear of all liens and offer it for sale at $110,000. The buyers, the Byrds, give a deposit of $3,000 and agree to make a down payment of $37,000. The Smiths agree to loan the Byrds $70,000, which will be amortized for 30 years at 12% interest. This type of mortgage would be:
a. Purchase money mortgage
b. Second mortgage.
c. Term loan.
d. Straight loan. - ANSWER-a. Purchase money mortgage
Conventional loans must be insured by PMI insurance if the down payment is less than:
a. 5%
b. 10%
c. 15%
d. 20% - ANSWER-d. 20%
A term or straight loan provides for:
a. Principal and interest payments monthly. b. Amortized payments.
Discount Points are figured on the:
a. Selling Price
b. Loan Balance
c. Salary of buyer
d. None of the above. - ANSWER-b. Loan Balance
Which of the following is shown on an estoppel certificate?
a. Unpaid balance and interest rate on mortgage. b. Time of foreclosure
c. Novation of the seller.
d. Any defects in the title. - ANSWER-a. Unpaid balance and interest rate on mortgage.
Insurance on an FHA loan is designed to protect the:
a. Government
b. Lender c. Borrower
d. Seller - ANSWER-b. Lender
If given the choice, it's best if the Buyer assumes an existing loan:
a. Assumption of
b. Subject to
c. Buy Down
d. None of the above. - ANSWER-b. Subject to
Two discount points charged on an FHA loan of $50,000 would amount to:
a. $500
b. $700
c. $1,000 d. $2,000 - ANSWER-c. $1,000
To compute the dollar value of a loan discount, each point is equal to:
a. 1% of the amount to be loaned.
b. 1% of the down payment. c. 1% of the appraised value.
d. 1% of the sales price. - ANSWER-a. 1% of the amount to be loaned.
The document from a lender that gives the status of the loan such as loan balance, interest, time remaining and note is the:
a. Loan certificate
b. Estoppel certificate
c. Equity certificate
d. Mortgage certificate - ANSWER-b. Estoppel certificate
PMI is required when a Buyer pays less then _____ % Down.
a. 5%
b. 10%
c. 20%
d. 25% - ANSWER-c. 20%
A buyer could have a deficiency judgment entered against him when he:
a. Purchases with an "assumption of" the mortgage b. Buys "subject to" a mortgage
c. Pays off the loan.
d. All of the above. - ANSWER-a. Purchases with an "assumption of" the mortgage
The Smiths own their house free and clear of all liens and offer it for sale at $110,000. The buyers, the Byrds, give a deposit of $3,000 and agree to make a down payment of $37,000. The Smiths agree to loan the Byrds $70,000, which will be amortized for 30 years at 12% interest. This type of mortgage would be:
a. Purchase money mortgage
b. Second mortgage.
c. Term loan.
d. Straight loan. - ANSWER-a. Purchase money mortgage
Conventional loans must be insured by PMI insurance if the down payment is less than:
a. 5%
b. 10%
c. 15%
d. 20% - ANSWER-d. 20%
A term or straight loan provides for:
a. Principal and interest payments monthly. b. Amortized payments.
