Session 2 - Chapter 3 Real Estate Financing Principles Quiz
If an owner obtained a $100,000 loan on a $200,000 property, what LTV was provided by the lender...? 50% (percent) 60% (percent) 80% (percent) 200% (percent)
50% (percent)
If an owner obtained an $80,000 loan on a $100,000 property, what LTV was provided by the lender...? 70% (percent) 75% (percent) 80% (percent) 65% (percent)
80% (percent)
A term loan is typically used for which of the following...? Second mortgages Home improvement loans Investor loans All of the above
All of the above
The Texas Department of Housing and Community Affairs offers which of the following mortgage and housing assistance programs...? The Texas First-Time Homebuyers Program The Texas Bootstrap Loan Program Veterans Housing Assistance Program All of the above
All of the above
Which of the followed is asked on a residential loan application...? Employment history Current monthly housing expenses List of assets and liabilities All of the above
All of the above
A loan made to finance the actual construction or improvement on land is referred to as a...? Sale and leaseback Home equity loan Wrap around loan Construction loan
Construction loan
A mortgage securing a loan made by investors without governmental underwriting is referred to as a/an...? Conventional loan Unconventional loan FHA loan VA loan
Conventional loan
The minimum interest rate set by the Federal Reserve for lending to other banks is known as the...? Bond rate Discount rate Minimum interest rate Term rate
Discount rate
Which of the following purchases newly originated and seasoned agricultural loans from lenders...? Ginnie Mae Freddie Mac Fannie Mae Farmer Mac
Farmer Mac
The U.S Central bank is known as the...? Federal Reserve System National Bank U.S. Reserve System Central Reserve System
Federal Reserve System
In this type of loan, a borrower initially pays a reduced interest rate, which gradually increases to the market rate after a period of time...? Flexible payment loan Conventional loan Term loan FHA loan
Flexible payment loan
Negative amortization may occur in which of the following types of loans...? Conventional loan Term loan Flexible payment loan FHA loan
Flexible payment loan
A loan against the equity in a home is known as a...? Reverse mortgage Home equity loan Construction loan Sale and leaseback
Home equity loan
A mortgage payment includes principal, interest, taxes, and...? Insurance payments Discount points Fees Deductibles
Insurance payments
A monthly mortgage payment primarily consists of which of the following in the early stages of the loan...? Principal Insurance Taxes Interest
Interest
The relationship between the amount of a mortgage loan and the lender's opinion of the value of property pledged to secure payment of the loan is known as the...? Value to payment ratio Debt to income ratio Interest to principal ratio Loan to value ratio
Loan to value ratio
A person whose principal business is the originating, financing, closing, selling and servicing of loans secured by the real property for institutional lenders on a contractual basis is referred to as a...? Mortgage banker Mortgage broker Real estate broker Loan originator
Mortgage banker
This occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due...? Positive amortization Balloon amortization Negative amortization Flexible amortization
Negative amortization
What do lenders require from all borrowers prior to issuing a loan...? Pre-approval Investment property as collateral Activation fees Recommendations
Pre-approval
Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as...? Title insurance Property insurance Private mortgage insurance Priority mortgage insurance
Private mortgage insurance
A financial arrangement where at the time of sale the seller retains occupancy by concurrently agreeing to lease the property from the purchaser is known as...? Home equity loan Wrap around mortgage Construction loan Sale and leaseback
Sale and leaseback
A mortgage payment includes principal, interest, insurance, and...? Discount points Taxes Fees Deductibles
Taxes
A mortgage that requires the mortgagor to pay interest only during the mortgage term, with the principal due at the end of the term is referred to as what type of mortgage...? ARM mortgage Term mortgage Conventional mortgage FHA mortgage
Term mortgage
The Fannie Mae form 1003 is also known as the...? Primary Loan Application HUD-1 Form Uniform Residential Loan Application Credit Loan Application
Uniform Residential Loan Application
The interest earned by a bank on the money it has loaned is referred to as...? Return IRR Yield Profit
Yield
Which of the following is a privately owned corporation that purchases FHA, VA, and conventional mortgages...? Fannie Mae Freddie Mac Ginnie Mae All of the above
Fannie Mae
Which of the following is a U.S. government agency that purchases FHA and VA mortgages...? HUD Department of Housing and Community Affairs Ginnie Mae Department of Finance
Ginnie Mae
The Federal Reserve regulates the flow of money and interest rates indirectly by controlling which of the following requirements for its member banks...? Credit requirements Reserve requirements Minimum loan requirements All of the above
Reserve requirements
XYZ Bank is willing to offer a 80% LTV loan on a property. If the property was appraised at $160,000, and the contract price is $180,000, what will be the loan amount offered by XYZ Bank...? $122,000 $128,000 $140,000 $144,000
$128,000
The Federal Reserve System is divided into how many geographical districts....? 12 13 25 50
12
What is required to fully satisfy a balloon mortgage...? A balloon payment A typical monthly payment A loan origination fee Discount points
A balloon payment
Which of the following is a source of real estate financing...? Local banks Mortgage banking companies Credit unions All of the above
All of the above
In this type of mortgage, the scheduled payment will not amortize the loan over the mortgage term...? Conventional mortgage Fully amortized mortgage Balloon mortgage FHA mortgage
Balloon mortgage
Which of the following is the riskiest loan for a residential borrower...? Conventional mortgage Balloon mortgage FHA mortgage VA mortgage
Balloon mortgage
A written notice of an obligation given by a corporation or government entity is known as a...? Deed Promissory Note Bond Bill of Sale
Bond
A person to whom a debt is owed is known as a...? Debtor Grantor Creditor Provider
Creditor
Most deed of trust loans are...? Fully amortized Interest only Partially amortized Balloon loans
Fully amortized
Which of the following will most likely benefit from a balloon mortgage...? Recently married couples Retirees First time homebuyers Homebuyers who only intend to live in the property for a few years
Homebuyers who only intend to live in the property for a few years
The financing charge that a lender requires is referred to as the...? Loan origination fee Prepayment fee Discount fee Closing fee
Loan origination fee
A broker who arranges a mortgage loan between a lender and a borrower for a fee is referred to as a...? Mortgage banker Mortgage broker Real estate broker Loan originator
Mortgage broker
A lender will most likely provide a higher LTV for which of the following property types...? Primary residence Investment property Secondary residence Vacation home
Primary residence
The primary function of a .......... is to promote thrift and home ownership? Credit Union Savings bank Commercial bank S&L
S&L
Once a bank make a loan to a borrower, the bank may sell that loan in which of the following markets...? Stock market Primary mortgage market Secondary mortgage market Trading market
Secondary mortgage market