COURSE 3
Jason bought a home four years ago for $153,000. If his home appreciated at an annual rate of 3%, how much would his home be worth today (round to the nearest dollar)?
$172,203 Multiply the beginning balance each year by 1.03% (103% in decimal form): Year one: $153,000 × 1.03 = $157,590. Year two: $157,590 × 1.03 = $162,318.70. Year three: $162,318.70 × 1.03 = $167,187.23. Year four: $167,187.23 x 1.03 = $172,202.85.
Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?
0%
Over how many years is a residential income-producing property depreciated?
27.5 years
A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?
3,593.75
Limited buyer income, property location and price, and a home buying education course are all eligibility requirements for ______.
A CalHFA mortgage assistance program
What is a collateralized mortgage obligation?
A debt security holder
Which of the following is a true statement about the use of a promissory note?
A promissory note is a legal instrument that's similar in nature to a contract.
Which act made some mortgage insurance premium deductions available to certain taxpayers?
American Taxpayer Relief Act of 2012
A ______ is often used in commercial applications when two or more properties are pledged as security for repayment of the loan.
Blanket mortgage
Marion has been a licensee for four years and earns a relatively steady income. Which of the following is a good way for Marion to estimate her monthly business expenses?
Calculating monthly expenses based on her expense history from the past year
A vendor and vendee are the parties involved when the finance instrument is a ______.
Contract for deed
A lender, reviewing a prospective applicant's loan application, wants to verify that he has a solid history of paying obligations on time. What should the lender request from him?
Credit report
Which of the following is a cooperative?
FHLB
The rate at which a bank can obtain an overnight loan from another bank without providing collateral is called the ______ rate.
Federal funds
Which of the following entities buys loans primarily through thrifts?
Freddie Mac
Real estate professionals keep a multitude of other professionals busy during the buying and selling process. Which of these professionals or entities are most active during the construction phase of real estate?
General contractors
Mark and Nancy purchased a municipal bond to help with the funding of a new school gymnasium. In exchange for their investment, what will they receive?
Interest
What's the purpose of the Community Reinvestment Act?
It requires that lenders invest in development and rehabilitation efforts that enable low- and moderate-income individuals and families to afford a home.
Which of these is true about the assessed value of real estate?
It's the value used to calculate the property taxes, and it's based on a percentage of the market value.
The number of ______ you put into a funnel will determine the amount of income you can make.
Leads
Closing costs are itemized on page two of the Closing Disclosure, and all amounts are ______.
Listed according to who paid them: the borrower, seller, or other
With a ______, no probate is required for assets named within it.
Living trust
What does it mean if the Fed decreases reserve requirements?
Member banks can keep fewer assets on deposit at the reserve bank.
Properties selling for more than they're worth and a flurry of new construction activity is most likely to occur in which real estate market phase?
Over supply
Which of these is an optional ongoing expense for a licensee?
Personal website
The two most common methods used when a bank fails are the payout method and the ______ method.
Purchase and assumption
Which of these items is an asset to list on a residential loan application?
Real estate
Which of the following types of real estate investments is NOT an active investment?
Real estate investment trust
When an investment property is sold, three taxes that apply are transfer tax, capital gains and ______.
Recaptured depreciation
______ is when the outstanding loan balance is reconfigured. It is a form of loan modification.
Recasting
Undervalued properties and a surplus of inventory are most likely to occur in what phase of the real estate market cycle?
Recovery
Long- and short-term debt instruments are called ______.
Securities
When the Treasury collects fewer funds than what is needed to pay the government's bills, what action might it take?
Sell securities
Which of the following is an option that might allow a licensee without much work history or very many assets to finance a real estate investment?
Seller financing
Which one of the following statements about the Torrens system is true?
The approach is only used in a handful of states.
Ronald is having his existing loan modified. During the application process, why will Ronald's lender perform a title search on his property?
The lender wants to ensure that an existing lien won't take priority over the modified loan.
What is a potential cause for a decrease in local economy driven by the Fed?
The reserve percentage is increased by the Fed.
The Farm Credit System funds are acquired from ______.
The sale of debt securities and international money markets
A buyer has agreed to purchase a property using a contract for deed. Who holds the legal title to the property during the term of the loan?
The seller
Which of the following statements is true about buydowns with a VA loan?
They're allowed only on fixed rate loans.
What's the purpose of California's Covered Loan Law?
To curb predatory lending practices
The American Recovery and Reinvestment Act provided mortgage assistance to ______.
Wounded servicemen and servicewomen
Which item would an appraiser find in the Improvements section of the Uniform Residential Appraisal Report?
Year built
