FREE Arkansas Real Estate License Financing and Settlement Practices Questions and Answers

Question 1

A home in Arkansas sells for $325,500. What is the amount of the state's real property transfer tax that the seller is typically responsible for paying at closing?

Accepted Answer

$1,074.15

Answer

$537.90

Answer

$1,627.50

Answer

$976.50

Question 2

According to the TILA-RESPA Integrated Disclosure (TRID) rule, a lender must provide the Closing Disclosure (CD) to the borrower at least how many business days prior to consummation of the loan?

Accepted Answer

Three

Answer

One

Answer

Five

Answer

Ten

Question 3

Which of the following is a primary characteristic of an FHA-insured loan compared to a typical conventional loan?

Accepted Answer

It allows for a lower down payment and has more flexible credit requirements.

Answer

It requires a minimum 20% down payment to avoid mortgage insurance.

Answer

It is designed for borrowers with high credit scores and substantial assets.

Answer

The seller is always required to pay the buyer's discount points.

Question 4

A property closing is scheduled for July 15th. The annual property taxes are $2,400 and have already been paid in full by the seller for the entire calendar year. Using a 365-day year, what will be the prorated tax credit to the seller at closing?

Accepted Answer

$1,299.45

Answer

$1,100.55

Answer

$1,152.00

Answer

$1,248.00

Question 5

In a real estate transaction involving a new mortgage, what is the primary purpose of a lender's (mortgagee's) title insurance policy?

Accepted Answer

To protect the lender's security interest in the property against losses from title defects.

Answer

To protect the buyer's equity in the property from title defects.

Answer

To guarantee the property will appreciate in value.

Answer

To insure the physical condition of the property at the time of sale.

Question 6

A buyer pays $4,500 for "discount points" on a $300,000 loan. What is the primary function of paying these points at closing?

Accepted Answer

To lower the interest rate on the mortgage for the life of the loan.

Answer

To reduce the required down payment amount.

Answer

To pay for the property appraisal and inspection fees.

Answer

To increase the agent's commission.

A home in Arkansas sells for $325,500.What is the amount of the state's real property transfer tax that the seller is typically responsible for paying at closing?

A home in Arkansas sells for $325,500.
What is the amount of the state's real property transfer tax that the seller is typically responsible for paying at closing?