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.

Read the first 7 Financial Analysis for Properties flashcards as text

  1. When a service member receives a PCS allowance (DPS/DITY move), how does this income typically affect mortgage qualification?

    Answer: It is generally not counted as qualifying income since it is non-recurring

    PCS moving allowances are one-time, non-recurring benefits and are generally excluded from qualifying income calculations by lenders.

  2. What does a property's 'price-to-rent ratio' indicate when evaluating a military market?

    Answer: Whether it is more financially advantageous to buy or rent in that market

    A low price-to-rent ratio favors buying while a high ratio suggests renting may be more cost-effective; this is especially relevant for short military duty stations.

  3. A VA-eligible service member is buying a $400,000 home in a high-cost area where the VA loan limit is $726,200. How much of a down payment is required?

    Answer: No down payment required

    Since the purchase price ($400,000) is below the county VA loan limit ($726,200), no down payment is required for a full-entitlement VA borrower.

  4. Which financial analysis tool helps a military investor compare properties of different sizes by normalizing value per unit of income?

    Answer: Gross Rent Multiplier (GRM)

    GRM normalizes property price relative to gross rent, allowing comparison across different-sized properties by reducing them to a common income multiple.

  5. A military buyer's DTI ratio is 48%. Most conventional loans require a maximum DTI of 45%. Which loan program offers the most flexibility for this borrower?

    Answer: VA loan

    VA loans do not set a hard maximum DTI limit and approve higher ratios when compensating factors like residual income are strong.

  6. In a declining military market (base closure announced), which property financial analysis adjustment is most appropriate?

    Answer: Apply a downward adjustment to projected appreciation and increase vacancy rate assumptions

    Base closure announcements reduce local demand, making conservative projections essential: lower appreciation expectations and higher vacancy rates reflect the new market reality.

  7. What is the primary purpose of a Comparative Market Analysis (CMA) in MRP financial consulting?

    Answer: To estimate a property's likely selling or purchase price based on recent comparable sales

    A CMA analyzes recent sales of similar properties to help buyers and sellers determine a realistic and competitive market price.