Real Estate License Practice Test Financing

Question 1

Usury roughly means:

Accepted Answer

Illegal rates of interest

Answer

Making loans without the co-signors' benefit

Answer

Lending money at variable interest rates

Answer

The ability to be used in many ways

Question 2

VA loan may be approved for the purchase of a one- to four-family home property if:

Accepted Answer

The veteran agrees to stay.

Answer

The loan will be amortized over a maximum of 20 years.

Answer

The down payment will be at least 10% of the purchase price.

Answer

The veteran certifies that the rent earned will cover the mortgage payments.

Question 3

What is a promissory note?

Accepted Answer

is the major proof of a debt.

Answer

cannot be carried out in connection with a real estate loan.

Answer

is an agreement to perform or refrain from performing specific activities.

Answer

is a government agency's guarantee.

Question 4

When is an appraiser least worried about the state's economy?

Accepted Answer

When appraising a medical building

Answer

When appraising the value of a hardware shop

Answer

When assessing a restaurant

Answer

When appraising a home

Question 5

If you finance a home with a long-term loan and make equal monthly payments, the amount of each payment applied to the remaining principle balance will be as follows:

Accepted Answer

Increases as the interest payment falls

Answer

Increases by a fixed amount during the life of the loan

Answer

Drops as the interest payment rises.

Answer

Decreases at a consistent rate

Question 6

When a straight note is compared to an installment note, the straight note:

Accepted Answer

There will be no principle payments over the loan's term, except for the final payment.

Answer

Will have equal yearly principal reduction payments

Answer

Will have a higher total effective interest rate than if the loan was an installment loan.

Answer

Will have all principal payments made over the loan's duration, including the final payment.

Question 7

Which of the following best describes a balloon payment?

Accepted Answer

The mandatory payment of the whole outstanding debt

Answer

A payment made to avoid a prepayment penalty.

Answer

The required payment of accrued interest prior to the first monthly regular installment.

Answer

A 30-year loan's tenth yearly payment

Question 8

What is a release clause in a mortgage?

Accepted Answer

Allows for the release of sections of the property supplied as security from the mortgage lien upon performance of a specified act.

Answer

Creates a lien that is second only to the lien created by taxes and assessments.

Answer

Allows for the extension of its due date.

Answer

Releases a guarantor from additional obligation if certain requirements are met.

Question 9

Which of the following statements regarding syndication is FALSE?

Accepted Answer

The majority of syndicate investors put a lot of their own money into their investments.

Answer

It reveals the borrower's attitude toward credit and debt management.

Answer

In order to be legal, a note must be linked to a mortgage.

Answer

Non-institutional lenders are exempt from usury law.

Question 10

The Tax Reform Act of 1986 provided a vehicle for the issuance of multiclass securities. What is the name of this entity?

Accepted Answer

REMIC

Answer

198000

Answer

Escrow officer

Answer

Reducing