Exam (elaborations)
ILLINOIS REAL ESTATE EXAM PREP FINANCING QUESTIONS AND ANSWERS
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ILLINOIS REAL ESTATE EXAM PREP FINANCING QUESTIONS AND ANSWERS
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Name: Score:154 Multiple choice questions
Term 1 of 154
A balloon payment is usually associated with a...
large payment during the term or at the end of the payment schedule
monthly payment that decreases over time
payment made to extend the loan duration
payment made at the beginning of a loan term
Term 2 of 154
vendor
structure a like-kind exchange involving a similar property
the loan amount
the balloon payment
seller under a land contact
Term 3 of 154
When compared with a 30-year payment period, taking out a loan with a 20-year payment
results in...
Faster payoff of principal
Annual percentage rate
Higher monthly payments
Negative amortization
,Term 4 of 154
In deciding whether or not to make a specific home loan, a lender would consider which of the
following factors most important
The degree of risk
Interest return
Amortization
Credit of borrower
Term 5 of 154
If a single parent is applying for a real estate loan, when would the fact have to be revealed
that part of the parent's income is from child support?
if the parent needed to report all sources of income for tax purposes
if the parent was relying on the income for payment on the loan
if the parent wanted to show off their child support income
if the parent was planning to use the child support for vacation instead
Term 6 of 154
An investor paid $300,000 for an apartment building, making a $75,000 cash down payment.
One year later, the property increased 10% in value. This resulted in a $30,000 or 40% gain on
the $75,000 equity. This is an example of...
equity
leverage
mortgage
amortization
,Term 7 of 154
purchase money mortgage
allows portions of the property, given as security, to be released from the mortgage lien
upon performance of a specified act
a note on which only its interest is paid during its term and no principal payments are
made
also known as seller or owner financing that is usually done in situations where the buyer
cannot qualify for a mortgage through traditional lending channels and is a mortgage
given from buyer to seller to secure the purchase price
allows the homeowner to pay off their defaulted payments, plus fees and costs, to
reinstate their mortgage and prevent them from losing their home
Term 8 of 154
The most significant requirement of a so-called "tax-free exchange" is that the properties be...
of a like kind
deed of trust
equal equities
of equal value
Term 9 of 154
The CFPB (Consumer Financial Protection Bureau) requires that...
lenders provide the borrower with a new loan estimate at the time of application or no
more than three days after application
the loan estimate is only provided after closing
borrowers are not required to review loan terms
lenders can change loan terms without notifying the borrower
, Term 10 of 154
The Federal National Mortgage Association (FNMA) was created under Title-II for the National
Housing Act and is primarily for the purpose of...
buying Title-II loans to keep the market liquid
offering down payment assistance to homebuyers
providing mortgage insurance to lenders
regulating interest rates on mortgages
Term 11 of 154
Contract for Deed Arrangement
the buyer has no rights to the property and only pays rent
the seller retains possession of the property and has no rights to it
the property is shared between the buyer and seller with equal rights
the buyer takes full possession of the property and gets equitable title to the property
Term 12 of 154
When the deed in which you take title to a property contains the following clause "subject to
the existing loan"...
the property is fully paid off and no further payments are required
the seller is responsible for paying off the existing loan
you automatically own the property free and clear
you are in danger of losing the property if the does not make the payments on the
underlying loan
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