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. A military buyer is comparing a 15-year vs. 30-year VA mortgage at identical rates. The 15-year has a $400 higher monthly payment. Which financial advantage does the 15-year loan offer?

    Answer: Substantially less total interest paid over loan life

    A 15-year mortgage builds equity faster and pays significantly less total interest because principal is repaid in half the time.

  2. When performing a rent-vs-buy analysis for a PCS move, which factor most directly affects the 'breakeven horizon'?

    Answer: Transaction costs as a percentage of home price

    Transaction costs (closing costs, agent commissions) are the primary upfront investment that must be recovered through appreciation and equity before buying beats renting.

  3. A service member has $15,000 in closing costs rolled into a VA IRRRL refinance. If the new loan saves $250/month, what is the break-even period?

    Answer: 60 months

    $15,000 ÷ $250/month savings = 60 months (5 years) to recoup the refinancing costs.

  4. Which property valuation approach is most commonly relied upon in VA appraisals for single-family homes in residential markets?

    Answer: Sales comparison approach

    The sales comparison approach uses recent sales of similar properties (comps) and is the primary method VA appraisers use for residential single-family homes.

  5. A military family converts their home to a rental. The lender will typically count what percentage of the rental income to qualify them for the next home purchase?

    Answer: 75%

    Most lenders apply a 75% vacancy/expense factor to rental income, crediting only 75% of the gross rent toward qualifying income.

  6. The cap rate on an investment property is calculated by dividing NOI by which of the following?

    Answer: Current market value or purchase price

    Cap Rate = NOI ÷ Property Value; it measures the return on investment independent of financing.

  7. A military homeowner must sell due to PCS orders after 18 months of ownership. Under the IRS military exception, what capital gains exclusion benefit may they qualify for?

    Answer: Full $250,000/$500,000 exclusion regardless of ownership duration

    The Military Exception allows service members to suspend the 5-year ownership period and claim the full exclusion even if the 2-year residence requirement isn't met due to PCS orders.