Arizona Real Estate License Arizona Real Estate License Real Estate Financing Concepts Questions and Answers 2

Question 1

In Arizona, which type of mortgage clause allows the lender to demand full repayment if the borrower sells or transfers the property?

Accepted Answer

Due-on-sale clause

Answer

Defeasance clause

Answer

Subordination clause

Answer

Prepayment clause

Question 2

What is the primary difference between a mortgage and a deed of trust in Arizona real estate financing?

Accepted Answer

A deed of trust involves three parties while a mortgage involves two

Answer

A mortgage allows non-judicial foreclosure while a deed of trust does not

Answer

A deed of trust has no promissory note requirement

Answer

A mortgage must be recorded but a deed of trust does not

Question 3

Which federal regulation requires lenders to provide borrowers with a Loan Estimate within three business days of receiving a mortgage application?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID)

Answer

Community Reinvestment Act

Answer

Home Mortgage Disclosure Act

Answer

Fair Credit Reporting Act

Question 4

A borrower obtains a loan where monthly payments cover only the interest for the first five years. What type of loan is this?

Accepted Answer

Interest-only loan

Answer

Fully amortized loan

Answer

Balloon payment loan

Answer

Reverse mortgage

Question 5

In Arizona, what is the typical redemption period after a judicial foreclosure sale?

Accepted Answer

Six months

Answer

Thirty days

Answer

One year

Answer

No redemption period

Question 6

Which ratio compares a borrower's total monthly debt obligations to their gross monthly income and is commonly used by lenders in Arizona?

Accepted Answer

Debt-to-income ratio

Answer

Loan-to-value ratio

Answer

Housing expense ratio

Answer

Equity-to-debt ratio