End Term Sessions 8-13 Quiz

A State Housing Finance Corporation makes mortgage loans available to qualified borrowers act an annual interest rate of 8.5% with a 10% down payment. If a broker makes reference to this source of financing when advertising real property for sale, which statement will require full disclosure in advertising under the Truth-in-Lending Act (Regulation Z)? a. financing available through the State Housing Finance Corporation b. financing available with 10% down payment c. financing available at low interest rates d. liberal financing available

b. financing available with 10% down payment

A land contract is also referred to as a(n): a. right of first refusal b. installment contract c. option contract d. listing contract

b. installment contract

The SC Residential Landlord and Tenant Act applies to: a. real estate licensees only b. managers of townhouses c. warehouse leasing agents d. a purchaser renting until closing

b. managers of townhouses

Which lender uses its own funds to fund loans that will be sold in the secondary mortgage market? a. FNMA b. mortgage banker c. mortgage broker d. Department of Veteran Affairs

b. mortgage banker

A CORRECT statement about a promissory note and a mortgage is that the: a. promissory note secures the mortgage b. mortgage secures the promissory note c. mortgage alone is required for a purchase money loan d. promissory note is signed by the lender, the mortgage by the borrower

b. mortgage secures the promissory note

In a real estate closing, the buyer generally pays for the: a. release of the mortgage b. recording of a new mortgage c. preparation of the deed d. sales commission

b. recording of a new mortgage

When a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable property. This is the principle of: a. conformity b. substitution c. supply and demand d. highest and best use

b. substitution

The elements or characteristics of value include: a. cost and age b. utility and demand c. scarcity and transformation d. economic and political

b. utility and demand

John and Sue have a combined monthly income of $4,975. They have $259 in monthly payments on debt that will not be paid in full for 4 years. For what amount of monthly payment do they qualify using the ratios of 28% and 36%? a. $1,791 b. $1,532 c. $1,393 d. $1,343

c. $1,393

An investor invested a certain amount of money and her investment pays her an income of $465 per month which represents a 4.5% return on the investment. What amount did she invest? a. $25,110 b. $55,800 c. $124,000 d. $132,650

c. $124,000

Using a 360 day year, calculate interim interest if the loan was $157,200, interest rate 6.5%, and the closing date was June 9. a. $255.12 b. $596.05 c. $624.34 d. $635.34

c. $624.34

A buyer paid $150,000 for a house and made a down payment of $27,000. What is the loan-to-value ratio? a. 95% b. 90% c. 82% d. 80%

c. 82%

All real estate lending transactions involving consumers are regulated by the: a. Regulation X (RESPA) b. Federal Fair Housing Act c. Truth-in-Lending Act (TILA) d. Housing and Urban Development

c. Truth-in-Lending Act (TILA)

A property owner sells a house to a buyer and agrees to finance $25,000 of the purchase price. The entry on the closing statement for the $25,000 will be a: a. debit to the buyer and a debit to the seller b. debit to the buyer and credit to the seller c. credit to the buyer and debit to the seller d. credit to the buyer and credit to the seller

c. credit to the buyer and debit to the seller

The difference between the fair market value and all financial encumbrances against a property is known as: a. cash flow b. liquidity c. equity d. arbitrage

c. equity

The secondary mortgage market refers to: a. the source for second mortgage loans b. commercial, multi-family and farm loan origination, as opposed to the single-family, residential c. investors who do not originate loans but purchase form originators d. investors who originate loans and sell them to other investors

c. investors who do not originate loans but purchase form originators

A CORRECT statement about a Competitive Market Analysis (CMA) is that it: a. must be performed by a licensed appraiser b. must be reviewed by an employing broker in order to be valid c. is based on the Sales Comparison (Market Data) approach to value d. will develop a final assessment of value by averaging three other appraisals

c. is based on the Sales Comparison (Market Data) approach to value

Which of the following statements BEST describes the income approach to value? a. it is best suited to appraise vacant land b. it is used more frequently than the market data approach c. it estimates an investment property's value based on its return d. it is the most common method used to appraise single family residence

c. it estimates an investment property's value based on its return

The four great forces which influence the value of property are: a. demand, utility, scarcity and traditional b. cultural, social, physical and economic c. social, economic, political and physical d. traditional, economic, cultural and demand

c. social, economic, political and physical

In SC, a reduction in real property taxes for a personal residence may be available to: a. a widow automatically upon the death of her husband b. an amputee military veteran while renting public housing c. someone who is legally blind and applies for the exemption d. a senior citizen who moved into SC six months ago

c. someone who is legally blind and applies for the exemption

The last lot in a subdivision sold for more than three times the price paid for the first lot sold. This is an example of the principle of: a. regression b. conformity c. supply and demand d. diminishing returns

c. supply and demand

A tenant was in possession of leased property. The landlord gave a written notice to the tenant to quit. The tenant, however, remained in the property and continued to send rent payments to the landlord. The landlord refused to accept the rent checks. This situation is described as a: a. periodic tenancy b. tenancy at will c. tenancy at sufferance d. tenancy for years

c. tenancy at sufferance

The owner is not required to repair or replace defective smoke detectors when: a. the tenant has occupied the house for more than 31 days b. the owner has furnished the tenant with written or oral instructions to repair the unit c. the damage to the smoke detector was caused by the tenant or someone authorized by the tenant to live in the house d. the owner has notified the tenant of their to charge the tenant for the cost of the repair or replacement

c. the damage to the smoke detector was caused by the tenant or someone authorized by the tenant to live in the house

In appraising, effective age means: a. the period over which a property will yield a worthwhile return b. the number of years since the property was built c. the indicated age due to the condition of the property d. the age that is indicated by the date stamped in the water closet

c. the indicated age due to the condition of the property

Under the SC Residential Landlord and Tenant Act, the tenant can agree to perform some of the landlord's tasks providing: a. it is not for the purpose of the landlord's attempt at evading obligations b. it is the only way that the tenant can get the work done c. the indicated age due to the condition of the property d. the age that is indicated by the date stamped inn the water closet

c. the indicated age due to the condition of the property

The purpose of Private Mortgage Insurance is to protect: a. owners who provide owner financing b. the borrowers if they lose their income c. the lender if the borrower defaults d. the public from predatory lenders

c. the lender if the borrower defaults

A home was sold and the closing took place on March 30th. Taxes are based on a calendar year. Taxes have not been paid for the current calendar year. Which of the following statements is true regarding the charges on the closing statement? a. thee buyer owes the seller for three months' taxes b. the buyer owes the seller for nine months' taxes c. the seller owes the buyer for three months' taxes d. the seller owes the buyer for nine months' taxes

c. the seller owes the buyer for three months' taxes

The direct sales comparison (market data) approach to value would be given more weight when seeking the market value of a: a. 25-year old church b. 10-unit apartment building c. retail commercial property d. 5-year-old single-family house

d. 5-year-old single-family house

Points on mortgages are: a. a return in excess of interest paid by the mortgagee to the mortgagor b. a return to the lender in excess of the APR c. a charge by the lender for originating a mortgage loan d. a charge by the lender to increase the yield on money invested

d. a charge by the lender to increase the yield on money invested

A loan that provides for increases and decreases in the interest rate during its term is known as a(n): a. equity sharing loan b. graduated-payment loan c. reverse-annuity loan d. adjustable-rate mortgage loan

d. adjustable-rate mortgage loan

A tenant vacated the property because the landlord refused to fix the hot water heater. This is called: a. actual eviction b. legal ejectment c. partial eviction d. constructive eviction

d. constructive eviction

Which activity falls under the provisions of the Real Estate Settlement Procedures Act (RESPA)? a. real estate salesperson selling interests in limited partnerships b. real estate brokers renting office space c. lenders selling residential mortgages in the secondary market d. consumer purchase of a residence in which a lender is involved

d. consumer purchase of a residence in which a lender is involved

Which economic principle indicates the economic improvement has on property? a. surplus b. substitution c. progression d. contribution

d. contribution

In the Cost Approach to value, land value is: a. excluded from final estimates of value b. not involved since land does not depreciate c. depreciated then added to depreciated improvements d. estimated by using the Sales Comparison or Market Data Approach

d. estimated by using the Sales Comparison or Market Data Approach

An appraiser estimating the value of a house with outdated bathroom fixtures must take into consideration: a. external (economic) obsolescence b. curable physical deterioration c. incurable physical deterioration d. functional obsolescence

d. functional obsolescence

When real estate is sold and financed with a contract for deed (land contract), possession is given to the buyer and title is usually: a. also given to the buyer b. required to be transferred to a land trust c. held by a trustee until a certain amount is paid d. kept by the seller until the full purchase price is paid

d. kept by the seller until the full purchase price is paid

A good source for comparable sales to use in the direct sales comparison approach to value is: a. estate sales b. bankruptcy records c. divorce settlements d. multiple listing service records

d. multiple listing service records

The type of real estate loan made by the seller to a buyer for part of the purchase price is called a: a. straight mortgage loan b. package mortgage loan c. reverse annuity mortgage loan d. purchase money mortgage loan

d. purchase money mortgage loan

A borrower does not meet all the obligations of the mortgage agreement. This is usually referred to as being in: a. default b. rescission c. defeasance d. redemption

default

Under the S.C. consumer protection code, a purchaser may: a. choose his or her own real estate agent b. elect to use the family attorney for the closing c. play a maximum $600 fee when assuming a loan on a house that will be owner occupied d. not be charged a pre-payment penalty on a real estate loan for investment properties under $50,000

b. elect to use the family attorney for the closing

When Pauline bought a house for $150,000 six years ago she borrowed $120,000. As the house increases in value and Pauline continues to make mortgage payments on her amortized mortgage loan, what is happening? a. her equity is growing b. her depreciation is decreasing c. her amortization is remaining neutral d. her payment to interest is remaining neutral

a. her equity is growing

You have pledged your home as security for a mortgage loan without giving up possession of it. This is called: a. hypothecation b. abstract c. subordination d. release of mortgage

a. hypothecation

The listing price of a home should be based on its: a. market value b. investment value c. replacement value d. salvage value

a. market value

With respect to market value, what is true? a. market value is the most probable price a property will bring if there is willing seller and a willing buyer b. market value and market price are always the same c. market value is determined by the actual cost of an item plus an appropriate rate of appreciation d. an appraisal will determine the market value of any property

a. market value is the most probable price a property will bring if there is willing seller and a willing buyer

A subordination clause in a loan is of greatest benefit to the: a. mortgagor b. trustee c. beneficiary d. mortgagee

a. mortgagor

Who signs the note in a situation that involves a purchase money mortgage loan? a. mortgagor b. mortgagee c. beneficiary d. trustee

a. mortgagor

The type of mortgage loan where interest-only payments are made in installments and the entire amount of principal borrowed is due at maturity is a/an: a. straight term mortgage loan b. amortized mortgage loan c. open-end mortgage loan d. conventional mortgage loan

a. straight term mortgage loan

There are many exemptions to the requirement that a residential property owner provide a buyer with a SC Residential Property Condition Disclosure Statement. Which one of these is one of the exemptions? a. the first sale of a never inhabited dwelling b. the sale of a dwelling from an aunt to a niece c. the sale of a dwelling to a church to be used as a residence for the pastor d. an individual selling a dwelling after purchasing the dwelling from the lender at a foreclosure auction

a. the first sale of a never inhabited dwelling

What is the basis for calculating the dollar amount of the state and county deed recording fees before a deed can be recorded in the public records? a. $1.85 per $1,000 or any fraction thereof of the sales price b. $1.85 per $500 or any fraction thereof of the sales price c. $3.70 per $100 or any fraction thereof of the sales price d. $3.70 per $500 or any fraction thereof of the sales price

b. $1.85 per $500 or any fraction thereof of the sales price

A buyer borrowed $40,000 for 30 years at 10% annual interest rate. The principal and interest payment was $351.03. How much interest would be paid in the first monthly payment? a. $400.00 b. $333.33 c. $325.60 d. $300.00

b. $333.33

Which entity functions as a mortgage insurer? a. Federal Reserve Bank b. Federal Housing Administration c. National Association of REALTORS d. Federal National Mortgage Association

b. Federal Housing Administration

In carrying out the Market Data (Sales Comparison) Approach to thee value of an owner-occupied single family residence, an appraiser would be justified in making a positive adjustment as a result of which distinction between the comparable chosen and the property being appraised. Comparable property: a. W has two more bedrooms than the subject property b. X has 150 square feet less than the subject property c. Y has a fireplace and the subject property does not d. Z is more accessible to shopping and transportation than the subject property

b. X has 150 square feet less than the subject property

A partially amortized loan will always have a: a. prepayment penalty b. balloon payment c. due-on-sale clause d. subordination clause

b. balloon payment

Two other names for contract for deed (land contract) are: a. bond for title and purchase money mortgage loan b. bond for title and installment land contract c. installment land contract and purchase money mortgage d. land sale contract and contract for equity

b. bond for title and installment land contract

A buyer is getting a 95% loan. If the price of the house is $87,500, how much is the down payment? a. $4,375 b. $4,605 c. $5,687 d. $5,775

a. $4,375

The discount paid by the seller is $2,800, representing 7 points. What is the amount of the loan? a. $40,000 b. $48,000 c. $52,000 d. $70,000

a. $40,000

Which loan is likely to have the lowest loan-to-value ratio? a. an uninsured conventional loan b. a VA loan c. an FHA insured loan d. an insured conventional loan

a. an uninsured conventional loan

A common rule of thumb is used in appraisals by real estate licensees as well as non-licensees is: a. cost per square foot b. cash on cash c. capitalization rate d. gross rent multipliers

a. cost per square foot

The time period during which a structure shows income that is attributable to the structure itself is known as its: a. economic life b. effective age c. period for depreciation d. period of profitability

a. economic life

An estate for years is created by: a. express agreement b. adverse possession c. operation of the law d. holding over

a. express agreement

VA loans are: a. guaranteed by the government b. available only for WWI, WWII, Korea and Vietnam veterans who served in combat c. fully insured loans d. made directly by the Department of Veterans Affairs

a. guaranteed by the government