Real Estate Finance Practice Test

95 Questions | By Missashleybock | Last updated: Mar 22, 2022 | Total Attempts: 6881

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1.

A type of mortgage in which the lender makes periodic payments to the borrow, who is required to be age 62 or older in the FHA program, is called
- A.
  
  Opposite
- B.
  
  Accelerate
- C.
  
  Reverse
- D.
  
  Deficit
2.

A conventional mortgage isa
- A.
  
  Amortizing
- B.
  
  Guaranteed by the FHA
- C.
  
  Not guaranteed by any government agency
- D.
  
  Approved by the VA
3.

A chattel mortgage is usually given in connection with
- A.
  
  Realty
- B.
  
  Farms
- C.
  
  Personal Property
- D.
  
  Commercial Property
4.

The lending of money at a rate of interest above the legal rate is
- A.
  
  Speculation
- B.
  
  Usury
- C.
  
  Both and B
- D.
  
  Neither A nor B
5.

One discount point is equal to
- A.
  
  1% of the sales price
- B.
  
  1% of the interest sale
- C.
  
  1% of the loan amount
- D.
  
  None of the above
6.

Discount points in FHA and VA loans are generally paid by the
- A.
  
  Lender
- B.
  
  Purchaser
- C.
  
  Seller
- D.
  
  Broker
7.

The main appeal of VA mortgages to borrowers lies in
- A.
  
  Low interest rates
- B.
  
  Minimum down payment
- C.
  
  An unlimited mortgage ceiling
- D.
  
  Easy availability
8.

When a loan is assumed on property that is sold
- A.
  
  The original borrower is relieved of further responsibility
- B.
  
  The purchaser becomes liable for the debt
- C.
  
  The purchaser must obtain a certificate of eligibility
- D.
  
  All of the above
9.

An estopple certificate is required when the
- A.
  
  Mortgage is sold to an investor
- B.
  
  Property is sold
- C.
  
  Property is being foreclosed
- D.
  
  Mortgage is assumed
10.

An owner who seeks a mortgage loan and offers three properties as security will give
- A.
  
  A blanket mortgage
- B.
  
  An FHA mortgage
- C.
  
  A conventional mortgage
- D.
  
  A chattel mortgage
11.

A clause in a mortgage or accompanying note that permits the creditor to declare the entire principle balance due upon certain default of the debtor is
- A.
  
  An acceleration clause
- B.
  
  An escalation clause
- C.
  
  A forfeiture clause
- D.
  
  An excelerator clause
12.

Which of the following statement is (are) false
- A.
  
  VA loans are insured loans
- B.
  
  FHA loans are guaranteed loans
- C.
  
  Both A and B
- D.
  
  None of the above
13.

A second mortgage is
- A.
  
  A lien on real estate that has a prior mortgage on it
- B.
  
  The first mortgage recorded
- C.
  
  Always made by the seller
- D.
  
  Smaller in amount than a first mortgage
14.

Fannie Mae Is
- A.
  
  An originator of mortgage loans
- B.
  
  A purchaser of mortgage loans
- C.
  
  An agency of the Federal Housing Administartion
- D.
  
  A branch of the Federal Reserve
15.

A large final payment on a mortgage loan is
- A.
  
  An escalator
- B.
  
  A balloon
- C.
  
  An amortization
- D.
  
  A package
16.

A requirement for a borrower under an FHA-insured loan is that he
- A.
  
  Not be eligible for a VA or conventional loan
- B.
  
  Have cash for the down payment and closing costs
- C.
  
  Have his wife sign as coborrower
- D.
  
  Certify that he is receiving welfare payments
17.

A mortgaged property can be
- A.
  
  Sold without the consent of the mortgagee
- B.
  
  Conveyed by the grantors making a deed to the grantee
- C.
  
  Both A and B
- D.
  
  None
18.

In the absence of an agreement to the contrary, the mortgage normally having priority will be the one
- A.
  
  For the greatest amount
- B.
  
  That is a permanent mortgage
- C.
  
  That was recorded first
- D.
  
  That is a construction loan mortgage
19.

The seller would have the least financing exposure in
- A.
  
  New financing by buyer
- B.
  
  Purchase money mortage
- C.
  
  Assumption of loan by buyer
- D.
  
  Purchase "subject to" mortgage
20.

The mortgage’s right to reestablish ownership after delinquency is known as
- A.
  
  Reestablishment
- B.
  
  Satisfication
- C.
  
  Equity of redemption
- D.
  
  Acceleration
21.

A first-time buyer's down payment source may be
- A.
  
  Savings
- B.
  
  A gift from a relative
- C.
  
  A personal loan
- D.
  
  Any of the above
22.

The money for making FHA loans is provided by
- A.
  
  Qualified lending institutions
- B.
  
  The Department of Housing and Urban Development
- C.
  
  The Federal Housing Administration
- D.
  
  The Federal Saving and Loans Insurance Corporation
23.

Amortization is best defined as
- A.
  
  Liquidation of a debt
- B.
  
  Depreciation of a tangible asset
- C.
  
  Winging up a business
- D.
  
  Payment of interest
24.

A mortgage is usually releseaded of record by a
- A.
  
  Real estate
- B.
  
  Mobile home
- C.
  
  Both A and B
- D.
  
  Neither
25.

A seller took 10% down in cash and provided 90% of the sale price as a first mortgage. The best way to describe the mortgage is
- A.
  
  Home equity loan
- B.
  
  Fixed interest rate
- C.
  
  Purchase-money mortgage
- D.
  
  Buyer financing