Escrow

Interest on a note carried by the seller begins to accrue on the actual close of escrow date which may differ from the originally scheduled closing date. Escrows are usually instructed to: Disregard any closing date change Hold funds until after closing Fill in the date as part of closing Pay the interest due

Fill in the date as part of closing

For escrow purposes, the second-half of the tax year begins: April 1. March 1. January 1. February 1.

January 1.

What occurs when monthly installment payments are insufficient to pay the interest accruing on the principle balance, so that the unpaid interest must be added to the principle due? Reverse amortization Forensic amortization Accelerated amortization Negative amortization

Negative amortization

An agent sold a home for $280,000. If the broker was to receive a 6% commission and the agent was to be paid 40% of this amount, the agent would receive: $ 6,350 $11,250 $10,080 $ 6,720

$ 6,720

An agent sold a home for $280,000. If the broker was to receive a 6% commission and the agent was to be paid 40% of this amount, the agent would receive: $ 6,720 $ 6,350 $11,250 $10,080

$ 6,720

Parker received a check in the amount of $152,000. If this was the net amount from the sale of his property after the broker had deducted a 5% commission, the selling price was: $156,000 $167,200 $160,000 $158,000

$160,000

Parker received a check in the amount of $152,000. If this was the net amount from the sale of his property after the broker had deducted a 5% commission, the selling price was: $167,200 $156,000 $158,000 $160,000

$160,000

If a home sold for $264,000 and the selling price was 10% more than what was paid for the property, the original cost of the property was: $240,000 $237,600 $246,000 $242,000

$237,600

If a home sold for $264,000 and the selling price was 10% more than what was paid for the property, the original cost of the property was: $246,000 $242,000 $240,000 $237,600

$240,000

The cost of a Binder Policy is usually: 5% of the Basic Title rate 1% of the Basic Title rate 20 % of the Basic Title rate 10% of the Basic Title rate

10% of the Basic Title rate

What percentage of the gross sales price must buyers withhold from sellers (who are foreign persons) according to Federal Withholding (FIRPTA) guidelines for the IRS for properties $300,000 and over? 30% 25% 15% 10%

30

When prorating charges in escrow between buyer & seller, property taxes are adjusted on the basis of: Number of days in that month 52 weeks 30 day month and 360 day year Actual number of days in month and 365 days per year

30 day month and 360 day year

A borrower has a monthly income of $5000. The proposed PITI is $1500. The monthly debt payment is $600. Using formulas, calculate the housing expense ratio and the debt to income ratio for the following: 23% and 33% 28% and 38% 30% and 42%. 25% and 35%

30% and 42%

If a Note with a $37500 balance is sold with a 20% discount, the amount paid for the Note is $ (Fill in the answer with numbers only, Please Do not include extra spaces, words, letters, symbols, commas, decimal points, cents or dollar signs or it will be marked incorrect. Type in a number such as: 98765)

30000

A buyer wants to put down 10% on the home he is purchasing for $560,000. He also wants to borrow another 10% as secondary financing. What is the loan amount for the first mortgage? 420,000 $510,000 $448,000 504,000

448,000

A buyer is purchasing a home for $525,000. The down payment is $75,000. What is the approximate LTV? 90% 86% 80% 70%

86

A buyer wants to put down 10% on the home he is purchasing for $560,000. He also wants to borrow another 10% as secondary financing. What is the CLTV?. (not the same as a similar question!) 90% 85% 70% 80%

90

A new loan is shown on the Buyer's escrow closing statement as: A Credit none of these. Debt A Charge

A Credit

Regarding discount points paid to obtain a lower interest rate, the formula to determine how long the lower rate loan must be maintained to before beginning to achieve a savings from the lower rate: All of these Interest Rate reduction multiplied by 12 Discount points are divided over the maximum term of the loan Cost of points divided by Monthly payment savings = Months to reach break-even

All of these

Which of the following are involved in determining and showing how the various charges are distributed in escrow? All of these Prorations Adjustments The estimated and final settlement statement

All of these

Which of the following is true concerning escrow fees? Escrow holders set their fees in accordance with local practice. Neither statement is correct The fee is usually a small percentage of the property's selling price, plus a set base charge. Both statements are correct

Both statements are correct

Since the seller last paid their existing loan payment on the first of the month and escrow closes on the last day of the same month, interest will be settled: Credit buyer Debit Seller one month interest No interest will be due for the month of escrow None of these Debit buyer Credit seller one month interest

None of these

A document signed by a landlord and tenant to show the status of payments and agreements between them is: Rental Account Log Tenants Rights Verification Offset Statement Lease Assignment

Offset Statement

Points are figured on the: all of the answers are correct. amount of the new loan. the selling price of the property. amount of commission.

amount of the new loan.

For a rental property escrow, rent already paid beyond the close of escrow date and any security deposit are shown in the settlement sheet as: buyer credits refunded to tenant seller credits Any of these

buyer credits

The responsibility for handling all funds and documents in an escrow lies with the: buyer and seller. none of the these. escrow holder. broker.

escrow holder

The accounting report for escrow is called the: escrow estimate sheet. cummulative cost ledger. none of these escrow settlement sheet.

escrow settlement sheet.

Title insurance premium or policy fee, paid: 30 days before the policy is issued. in the escrow, at closing of escrow upon each aniversary of the closing 30 days after the policy is issued.

in the escrow, at closing of escrow

Use of the Valuation or Consideration form is NOT : any of these for determining values placed on the properties. for balancing the equities instead of escrow instruction

instead of escrow instruction

Funds paid to the seller directly outside of escrow as part of the total purchase price are shown on the seller's escrow closing statement as: Debit Prorated Unknown Credit

Debit

An Escrow Settlement Sheet will include: Seller's Origninal Purchase Price Buyer's Adjusted Gross Income Debits & Credits for Buyer & Seller Federal Income taxes owed by buyer

Debits & Credits for Buyer & Seller

The practice of purchasing real estate using a small amount of your own money and a larger proportion of borrowed funds is called: loan floating debt mortgaging all answers are correct leverage

leverage

A common loan cost is also known as the: miscellaneous cost. loan origination fee. reserve fee. cost of funds.

loan origination fee.

For all monies received, you must: withhold 10% for service fees. make receipts. both choices neither choice

make receipts.

Prorations apply to charges incurred by either party: prior to the transfer of property. at any time before, during or after the transfer of property. none of these following the transfer of property.

prior to the transfer of property.

When prorating, adjustments are made based on the actual number of days in the month for all of these loan interest fire insurance property taxes

property taxes

In the final settlement sheet, if the credits column is less than the debits total you face the possibility of closing escrow: with excessive funds. short of funds. with balanced funds. none of these

short of funds.

A lien is a financial obligation against: the property. the property owner. any lenders. the escrow holder.

the property

A lien is a financial obligation against: the escrow holder. the property owner. the property. any lenders

the property.

When calculating transfer tax for the $136,000 property in the exchange sample escrow: transfer tax is owed on $136,000 transfer tax is owed on $76,000 transfer tax is owed on the total value minus the unpaid trust deed balance transfer tax is not owed on this property in the exchange

transfer tax is owed on the total value minus the unpaid trust deed balance

A Beneficiary Demand statement must include: Interest amount per day for proration Unpaid Principal Balance Fees due all of these.

all of these

An escrow settlement sheet or estimated charges sheet shows: all of these prorations and adjustments total consideration to be paid payoff figures

all of these

The escrow holder should audit the file before close of escrow to confirm that the bills match the amount paid to the remitting party the file has been perfected the escrow funds will balance with all funds received and no funds are due all of these

all of these