Real Estate License Financing 2

Question 1

Which clause in a mortgage allows the lender to demand full repayment if the borrower sells the property?

Accepted Answer

Due-on-sale clause

Answer

Acceleration clause

Answer

Defeasance clause

Answer

Subordination clause

Question 2

What does PITI stand for in a monthly mortgage payment?

Accepted Answer

Principal, Interest, Taxes, Insurance

Answer

Payment, Interest, Term, Income

Answer

Principal, Income, Title, Insurance

Answer

Premium, Interest, Taxes, Interest

Question 3

A loan that requires a large lump-sum payment at the end of the term is called a:

Accepted Answer

Balloon loan

Answer

Amortized loan

Answer

Adjustable-rate loan

Answer

Wraparound loan

Question 4

The federal law requiring lenders to disclose the true cost of credit, including APR, is:

Accepted Answer

Truth in Lending Act (Regulation Z)

Answer

RESPA

Answer

ECOA

Answer

Fair Housing Act

Question 5

In a buydown, what is reduced for the borrower?

Accepted Answer

The interest rate

Answer

The principal balance

Answer

The loan term

Answer

The property taxes

Question 6

Which type of loan adjusts the interest rate periodically based on an index?

Accepted Answer

Adjustable-rate mortgage (ARM)

Answer

Fixed-rate mortgage

Answer

Term loan

Answer

Purchase-money mortgage

Question 7

Private mortgage insurance (PMI) is typically required when the down payment is less than:

Accepted Answer

20%

Answer

5%

Answer

10%

Answer

15%