How Well Do You Know The Language Of Property Investment?

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Quizzes Created: 1 | Total Attempts: 143
| Attempts: 143
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  • 1/15 Questions

    The mortgage represents a portion of the total value of the real estate. This is expressed by the financial phrase "loan to value ratio" (the relationship between loan and value of property) 

    • True
    • False
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About This Quiz


How well do you know the language of property investment? It is hard to navigate with out help if you don't speak the language!

How Well Do You Know The Language Of Property Investment? - Quiz

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  • 2. 

    Legal documents through which a loan is obtained to purchase real estate is called a mortgage? 

    • True

    • False

    Correct Answer
    A. True
    Explanation
    A mortgage is a legal document that is used to obtain a loan for the purpose of purchasing real estate. It serves as a security for the lender, as it gives them the right to take possession of the property if the borrower fails to repay the loan. Therefore, the statement "Legal documents through which a loan is obtained to purchase real estate is called a mortgage" is true.

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  • 3. 

    A mortgage is provided by lenders who charge interest for the use of the borrowed money to make a profit. This amount is known as the principal. 

    • True

    • False

    Correct Answer
    A. True
    Explanation
    A mortgage is a loan provided by lenders to borrowers, typically for the purpose of purchasing a property. Lenders charge interest on the borrowed money as a way to make a profit. The interest is calculated based on the principal amount, which is the initial sum borrowed. Therefore, the statement that a mortgage is provided by lenders who charge interest and the amount is known as the principal is true.

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  • 4. 

    An increase in the value or worth of something due to economic or related causes such as supply and demand, which may prove to be either permanent or temporary.

    • Appropriation

    • Depreciation

    • Appreciation

    • Amortization

    Correct Answer
    A. Appreciation
    Explanation
    Appreciation refers to the increase in value or worth of something, which can be attributed to economic factors like supply and demand. This increase can either be permanent or temporary.

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  • 5. 

    The repayment of financial obligation over a period of time in a series of periodic instalments, eg. the payback owed to the lender

    • Amoritization

    • Proration

    • Debit

    • Credit

    Correct Answer
    A. Amoritization
    Explanation
    When used in the context of a home purchase, amortization is the process by which loan principal decreases over the life of a loan, typically an amortizing loan. With each mortgage payment that is made, a portion of the payment is applied towards reducing the principal, and another portion of the payment is applied towards paying the interest on the loan.

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  • 6. 

    Deduction is:

    • An amount due or owed

    • A liability or equity entered in a party's favour.

    • An amount of money added to income when calculating federal income tax.

    • An amount of money subtracted from income when calculating federal income tax.

    Correct Answer
    A. An amount of money subtracted from income when calculating federal income tax.
    Explanation
    Deduction refers to the amount of money that is subtracted from an individual's income when calculating their federal income tax. This deduction helps to reduce the taxable income, resulting in a lower tax liability. Therefore, the correct answer is "An amount of money subtracted from income when calculating federal income tax."

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  • 7. 

    Something of value that is given to show acceptance or acknowledgement of a contract, such as money or a promise

    • Consideration

    • Assessed Value

    • Accepted Notice

    • Appraised Value

    Correct Answer
    A. Consideration
    Explanation
    Consideration refers to something of value that is given by one party to another as a part of a contract. It can be in the form of money, goods, services, or even a promise to do or not to do something. It is an essential element of a contract and signifies the acceptance and acknowledgement of the agreement between the parties involved. In this context, consideration is the most appropriate answer as it aligns with the definition provided.

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  • 8. 

    Counteroffer is:

    • A rejection of an offer to buy or sell, with a simultaneous substitute offer.

    • A change of mind of an offer to buy or sell taking everything "off the table".

    • An acceptance of an offer to buy or sell, with a simultaneous substitute offer.

    • None of the above

    Correct Answer
    A. A rejection of an offer to buy or sell, with a simultaneous substitute offer.
    Explanation
    A counteroffer refers to the act of rejecting an initial offer to buy or sell something, while simultaneously proposing a substitute offer. It indicates a change in the terms or conditions of the original offer, typically in response to dissatisfaction or a desire for different terms. This allows the parties involved to negotiate and potentially reach a mutually agreeable agreement.

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  • 9. 

    In general, when the supply of a certain commodity increases, 

    • Price tends to rise

    • Price tends to drop

    • Demand for it tends drop

    • Demand for it tends rise

    Correct Answer
    A. Price tends to drop
    Explanation
    If demand is constant and supply increases, sellers complete with each other by lowering prices.

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  • 10. 

    A liability or equity entered in a party's favour:

    • Credit

    • Cost

    • Annuity

    • Debit

    Correct Answer
    A. Credit
    Explanation
    In accounting, when a liability or equity is entered in a party's favor, it is recorded as a credit. This means that the party is receiving a benefit or an increase in their financial position. Credits are used to record increases in liabilities, equity, and revenue accounts, while debits are used to record decreases in these accounts. Therefore, in this context, the correct answer is credit.

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  • 11. 

    The mortgage application fee is a fee that is paid by the seller and is usually paid at settlement. The is refundable if a mortgage cannot be obtained.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The mortgage application fee is paid by the borrower at the time of mortgage application is usually non refundable.

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  • 12. 

    A method of transferring the rights and obligations of a contract to a third party without canceling the contract

    • Deed

    • Assignment

    • Deed of release

    • Direct deeding

    Correct Answer
    A. Assignment
    Explanation
    Assignment is the correct answer because it refers to the act of transferring the rights and obligations of a contract to a third party without canceling the contract. This is commonly done when one party wants to transfer their contractual obligations to another party, allowing the new party to step into the original party's shoes and fulfill their obligations.

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  • 13. 

    Principal characteristics of fee simple title include all of the following except: 

    • It is transferable

    • It is a free emcumbrances

    • It is of indefinite duration

    • It may be willed

    Correct Answer
    A. It is a free emcumbrances
    Explanation
    Fee simple title is not necessarily free of loans or other emcumbrances

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  • 14. 

    When a part of a building, or an obstruction physically intrudes, overlaps, or trespasses the property of another, this is referred to as an:

    • Assesmblage

    • Escheat

    • Easement

    • Encroachment

    Correct Answer
    A. Assesmblage
  • 15. 

    Charging an excessively high rate of interest is known as gouging the buyer.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    This practice is called usury, there is no usury limit on most mortgage loans. Investors need to be mindful to compare mortgage interest rates between lenders.

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  • Current Version
  • Aug 07, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 20, 2014
    Quiz Created by
    Planinsek
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