Real Estate Sales Exam Real Estate Sales Financing and Valuation Questions and Answers 2

Question 1

A buyer obtains an FHA loan with a 3.5% down payment on a $280,000 home. What is the approximate upfront mortgage insurance premium (UFMIP) at the current rate of 1.75%?

Accepted Answer

$4,732.50

Answer

$4,900

Answer

$4,830

Answer

$4,550

Question 2

In the income approach to valuation, a property generates $48,000 in annual net operating income and the capitalization rate is 6%. What is the estimated property value?

Accepted Answer

$800,000

Answer

$288,000

Answer

$720,000

Answer

$960,000

Question 3

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

Accepted Answer

Due-on-sale clause

Answer

Escalation clause

Answer

Defeasance clause

Answer

Subordination clause

Question 4

A property sold for $350,000 and the comparable sale across the street had a pool valued at $15,000 that the subject property lacks. Using the sales comparison approach, what adjustment is made?

Accepted Answer

Subtract $15,000 from the comparable

Answer

Add $15,000 to the subject property

Answer

Add $15,000 to the comparable

Answer

Subtract $15,000 from the subject property

Question 5

What does the loan-to-value (LTV) ratio represent in real estate financing?

Accepted Answer

The ratio of the mortgage amount to the property's appraised value or sale price, whichever is lower

Answer

The ratio of the borrower's equity to the property's appraised value

Answer

The ratio of annual debt service to gross income

Answer

The ratio of closing costs to the total loan amount

Question 6

Under what condition would a lender most likely require private mortgage insurance (PMI) on a conventional loan?

Accepted Answer

When the loan-to-value ratio exceeds 80%

Answer

When the borrower has a credit score below 620

Answer

When the property is located in a flood zone

Answer

When the loan term exceeds 15 years

A buyer obtains an FHA loan with a 3.5% down payment on a $280,000 home.What is the approximate upfront mortgage insurance premium (UFMIP) at the current rate of 1.75%?

A buyer obtains an FHA loan with a 3.5% down payment on a $280,000 home.
What is the approximate upfront mortgage insurance premium (UFMIP) at the current rate of 1.75%?