Question 1

The buyer normally pays the discount points when a conventional loan is taken out to purchase a residence.

Accepted Answer

A) True 
 B)False

Question 2

The buyer agrees to pay $90,000 for a home, contingent upon obtaining an 80% loan. The lender charges $3,600 for points. How many points were charged?

Accepted Answer

A)  2 points 
B)  4 points 
C)  5 points 
D)  6 points 
A)  2 points 
B)  4 points 
C)  5 points 
D)  6 points

Question 3

Loan points increase the yield to the lender.

Accepted Answer

A) True 
 B)False

Question 4

Choose the most appropriate answer for each.
-one hundredth of the total amount;1% of a loan

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 5

The expenses, which a lender incurs while processing a mortgage loan application, are recovered from the borrower as

Accepted Answer

A)  discount points. 
B)  origination fees. 
C)  mortgage insurance premium. 
D)  private mortgage insurance. 
A)  discount points. 
B)  origination fees. 
C)  mortgage insurance premium. 
D)  private mortgage insurance.

Question 6

Choose the most appropriate answer for each.
-a charge by a lender that will allow them to sell the loan in the secondary market at a discount

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 7

Choose the most appropriate answer for each.
-a payment that is larger than any of the previous payments

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 8

What is the annual interest on $50,000 calculated at a rate of 8.125% per annum?

Accepted Answer

A)  $331.00 
B)  $406.25 
C)  $3,310.00 
D)  $4,062.50 
A)  $331.00 
B)  $406.25 
C)  $3,310.00 
D)  $4,062.50

Question 9

The homeowner has made regular mortgage payments over ten years and the housing values in the neighborhood have steadily risen. The equity has steadily increased.

Accepted Answer

A) True 
 B)False

Question 10

In the event of default and subsequent foreclosure, which borrower is responsible for making good any losses suffered?

Accepted Answer

A)  FHA 
B)  VA 
C)  HUD 
D)  90% conventional 
A)  FHA 
B)  VA 
C)  HUD 
D)  90% conventional

Question 11

For a veteran to obtain a VA loan, it is necessary to have a

Accepted Answer

A)  certificate of optimal value. 
B)  certificate of eligibility. 
C)  history of property ownership. 
D)  certificate of deferment. 
A)  certificate of optimal value. 
B)  certificate of eligibility. 
C)  history of property ownership. 
D)  certificate of deferment.

Question 12

A home buyer wants to borrow $100,000. The lender quotes a loan origination fee of one point and a loan discount of one point. What size loan must be obtained to pay the two points and still leave $100,000?

Accepted Answer

A)  $96,000 
B)  $98,039 
C)  $102,000 
D)  $102,041 
A)  $96,000 
B)  $98,039 
C)  $102,000 
D)  $102,041

Question 13

Choose the most appropriate answer for each.
-a mortgage wherein the borrower pays principal, interest, taxes and insurance in the same payment

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 14

A house sells for $102,000 and is appraised at $100,000 by a lender who is willing to make a 75% loan-to-value loan. How much down payment will this house require?

Accepted Answer

A)  $25,500 
B)  $27,000 
C)  $75,000 
D)  $76,500 
A)  $25,500 
B)  $27,000 
C)  $75,000 
D)  $76,500

Question 15

The type of loan whereby the borrower makes interest only payments during the life of the loan with the entire principal due for the final payment is called

Accepted Answer

A)  a discounted loan. 
B)  an amortized loan. 
C)  a term loan. 
D)  a partially amortized loan. 
A)  a discounted loan. 
B)  an amortized loan. 
C)  a term loan. 
D)  a partially amortized loan.

Question 16

The difference between the market value of a property and the debt owed against it is called the owner's ____________________.

Accepted Answer

The answer of The difference between the market value of...

Question 17

Choose the most appropriate answer for each.
-a loan requiring periodic payments that include both interest and principal

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 18

A loan progress chart is used in connection with

Accepted Answer

A)  partially amortized loans. 
B)  term loans. 
C)  index loans. 
D)  straight loans. 
A)  partially amortized loans. 
B)  term loans. 
C)  index loans. 
D)  straight loans.

Question 19

Choose the most appropriate answer for each.
-a loan that requires the borrower to pay interest only until maturity, at which time the full amount of the loan must be repaid

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Question 20

Choose the most appropriate answer for each.
-a table showing the monthly payments required to completely pay off a loan

Accepted Answer

A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP 
A) Amortized loan 
B) Amortization tables 
C) Balloon loan 
D) Budget mortgage 
E) Conventional loan
F)Discount point
G)Equity
H)FHA
I)Impound account
J)Loan balance table
K)Loan origination fee
L)Loan-to-value ratio
M)Maturity
N)Partially amortized loan
O)PITI payment
P)PMI
Q)Point
R)Principal
S)Term loan
T)UFMIP

Exam 10: Lending Practices

The buyer normally pays the discount points when a conventional loan is taken out to purchase a residence.

The buyer agrees to pay $90,000 for a home, contingent upon obtaining an 80% loan. The lender charges $3,600 for points. How many points were charged?

Loan points increase the yield to the lender.

Choose the most appropriate answer for each. -one hundredth of the total amount;1% of a loan

The expenses, which a lender incurs while processing a mortgage loan application, are recovered from the borrower as

Choose the most appropriate answer for each. -a charge by a lender that will allow them to sell the loan in the secondary market at a discount

Choose the most appropriate answer for each. -a payment that is larger than any of the previous payments

What is the annual interest on $50,000 calculated at a rate of 8.125% per annum?

The homeowner has made regular mortgage payments over ten years and the housing values in the neighborhood have steadily risen. The equity has steadily increased.

In the event of default and subsequent foreclosure, which borrower is responsible for making good any losses suffered?

For a veteran to obtain a VA loan, it is necessary to have a

A home buyer wants to borrow $100,000. The lender quotes a loan origination fee of one point and a loan discount of one point. What size loan must be obtained to pay the two points and still leave $100,000?

Choose the most appropriate answer for each. -a mortgage wherein the borrower pays principal, interest, taxes and insurance in the same payment

A house sells for $102,000 and is appraised at $100,000 by a lender who is willing to make a 75% loan-to-value loan. How much down payment will this house require?

The type of loan whereby the borrower makes interest only payments during the life of the loan with the entire principal due for the final payment is called

The difference between the market value of a property and the debt owed against it is called the owner's ____________________.

Choose the most appropriate answer for each. -a loan requiring periodic payments that include both interest and principal

A loan progress chart is used in connection with

Choose the most appropriate answer for each. -a loan that requires the borrower to pay interest only until maturity, at which time the full amount of the loan must be repaid

Choose the most appropriate answer for each. -a table showing the monthly payments required to completely pay off a loan

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

The Loan and the Consumer

Sources of Financing

Types of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

Investing in Real Estate

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