Practice Test Geeks(MRP) Military Relocation Professional Practice Test
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Financial Analysis for Properties Flashcards

7 cards from real MRP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Under the Servicemembers Civil Relief Act (SCRA), what is the maximum interest rate a lender can charge on pre-service debts during active duty?

    Answer: 6%

    The SCRA caps interest rates on pre-service obligations at 6% per year during active duty military service upon proper written notice.

  2. When analyzing a home purchase for a military buyer, which factor is MOST unique to their financial analysis compared to civilian buyers?

    Answer: Potential PCS relocation reducing planned holding period

    Military buyers face unpredictable PCS orders that can force a sale before achieving break-even on buying costs, making holding period analysis critical.

  3. A military member's monthly gross income is $5,500. Their proposed housing payment (PITI) is $1,540. What is their housing expense ratio?

    Answer: 28%

    Housing expense ratio = $1,540 ÷ $5,500 = 0.28, or 28%, which is within conventional lending guidelines.

  4. A service member is considering converting their primary home to a rental upon PCS. Which calculation determines if the rental will cash flow positively?

    Answer: Monthly rent minus PITI and management fees

    Positive cash flow exists when monthly rent exceeds all monthly expenses including mortgage payment, taxes, insurance, and management fees.

  5. In VA loan underwriting, what does the residual income requirement primarily assess?

    Answer: Whether sufficient funds remain for family living expenses after all obligations

    VA residual income measures the money left after all monthly debts and shelter expenses, ensuring the veteran's family can meet basic living needs.

  6. A property has a gross rent multiplier (GRM) of 120. The property sells for $240,000. What is the estimated monthly rent?

    Answer: $2,000

    Monthly Rent = Price ÷ GRM = $240,000 ÷ 120 = $2,000 per month.

  7. Which scenario would MOST likely result in a military homeowner facing negative equity upon PCS?

    Answer: Purchased at peak market with minimal down payment in a declining market

    Buying at market peak with little equity cushion leaves no buffer when prices decline, creating negative equity that complicates selling during PCS.