Arkansas Real Estate License Financing and Settlement Practices 2

Question 1

Under RESPA, which of the following is NOT considered a settlement service?

Accepted Answer

Home inspection negotiation by buyer

Answer

Negotiation by the buyer is not a settlement service under RESPA; services like title search, appraisal, and credit reporting are.

Question 2

A borrower applies for a mortgage in Arkansas. Under TRID, within how many business days must the lender deliver the Loan Estimate?

Accepted Answer

3 business days

Answer

TRID requires lenders to deliver the Loan Estimate within 3 business days of receiving a completed loan application.

Question 3

Which type of mortgage loan features a fixed interest rate but payments that increase at specified intervals?

Accepted Answer

Graduated payment mortgage

Answer

A graduated payment mortgage (GPM) has a fixed rate but scheduled payment increases over time, often used by borrowers expecting rising incomes.

Question 4

In Arkansas, the document that transfers legal title to real property at closing is called a:

Accepted Answer

Warranty deed

Answer

A warranty deed conveys legal title and includes the grantor's guarantee against title defects.

Question 5

A lender charges a borrower 2 discount points on a $200,000 loan. How much does the borrower pay in discount points?

Accepted Answer

$4,000

Answer

Each discount point equals 1% of the loan amount, so 2 points on $200,000 = $4,000.

Arkansas Real Estate License Practice Test