Valuing and Financing Property Flashcards
7 cards from real Wisconsin Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Valuing and Financing Property flashcards as text
A key advantage of an FHA-insured loan for buyers is:
Answer: A lower required down payment
FHA loans allow low down payments (as little as 3.5%), making homeownership more accessible.
VA loans are available to eligible:
Answer: Veterans and active-duty service members
VA loans are a benefit for qualifying veterans, active-duty members, and certain surviving spouses.
Points paid to a lender to reduce the interest rate are known as:
Answer: Discount points
Discount points are prepaid interest paid at closing to buy down the loan's interest rate.
One discount point equals what percentage of the loan amount?
Answer: 1%
One point equals 1% of the loan amount.
Which federal law requires lenders to disclose the annual percentage rate (APR) to borrowers?
Answer: Truth in Lending Act
The Truth in Lending Act (Regulation Z) requires disclosure of the APR and total finance charges.
In a loan with a due-on-sale (alienation) clause, what happens if the owner sells?
Answer: The lender can require the loan be paid in full
A due-on-sale clause lets the lender demand full repayment when the property is transferred.
The loan-to-value (LTV) ratio is calculated by dividing the loan amount by:
Answer: The appraised value or purchase price, whichever is lower
LTV is the loan amount divided by the lesser of appraised value or sale price, expressing lender risk.