REE 3043 EXAM 1 QUESTIONS WITH REVIEWED ANSWERS
Negative amortization - Answer-Occurs when the payment is not enough to even cover interest. Remaining interest is applied to principle causing loan balance to increase
Mortgage payments - Answer-Cover PITI Principle, Interest, Taxes, insurance
...
REE 3043 EXAM 1 QUESTIONS WITH
REVIEWED ANSWERS
Negative amortization - Answer-Occurs when the payment is not enough to even cover
interest. Remaining interest is applied to principle causing loan balance to increase
Mortgage payments - Answer-Cover PITI Principle, Interest, Taxes, insurance
Interest payments - Answer-Cover the cost of using money for the past
Market value - Answer-Probable selling price. You want this high
Investment value - Answer-How much an investor finds the property worth. You want
this high
Assessed value - Answer-Used by the property appraisers office for tax purposes. You
what this low
Insurable value - Answer-How much you will need to replace the entity
Appraisal Steps -D - Answer-Define the problem.
Appraisal Steps - G - Answer-Gather the data
Appraisal steps - A1 - Answer-Analyze the data
Appraisal Steps - A2 - Answer-Arrive at your conclusion
Appraisal steps - W - Answer-Write up conclusion
Depreciation - Answer-A reduction in the value of an asset over time
Functional Obsolescence - Answer-An older design and the building doesn't function in
such a way maintain value
Cost approach - Answer-Can you determine the cost to replace reproduce any type of
property
Fully Amortized Mortgage - Answer-Periodic payments that are sufficient enough to
cover the entirety of the loan and the entirety of the interest by the end of the term
Interest only loan - Answer-Making payments toward only the interest during the
duration of the loan. At the end the principal is paid as one payment.
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