Finance practice exam 6
Secure and Fair Enforcement for Mortgage Licensing Act
A new apartment building is going up downtown. The owner secured interim financing for the job. Which of these loan types are interim financing?
Average sale price of homes in the area where she'll be working
Lisa is estimating her annual income. She expects that her commission will be 2.5%, and she plans to close at least seven transactions in the year. What else does she need to complete her estimate?
Right of first refusal
Margaret isn't ready to buy Jill's property, but she pays Jill a fee that guarantees she'll be notified if another buyer appears. If another buyer does make an offer, Margaret has the option to buy Jill's property if she can. Margaret has a(n) ______ on Jill's property.
Appraisal
Page three of the Loan Estimate includes information about a consumer's right to receive a copy of the ______ from the lender.
The percentage of clients who turn into closed transactions
The average commission you earn from each transaction is $6,000, and 20% of your leads turn into clients. Using the funnel, what else do you need to know to calculate how many leads you will need if you want to earn $50,000 in a year?
Judicial
This foreclosure process must be used when the security instrument doesn't contain a power of sale clause.
The loan amount has to be secured by the property itself.
What IRS restrictions apply to borrowers who want to deduct the interest paid on their mortgage loan?
Business income is taxed on the owner's personal return
What is meant by pass-through taxation?
The economy may grow due to an increased money supply.
What is the most likely effect when the Fed buys securities on the open market?
To convert the interest rate from fixed to adjustable
What's the purpose of the Fixed/Adjustable Rate Note?
Requires financial institutions to maintain, report, and publicly disclose information about their mortgages
What's the purpose of the Home Mortgage Disclosure Act?
Build strong, resilient, and inclusive communities
When HUD pursues actions that are designed to reduce housing discrimination and help communities recover from disasters, which of its goals is it supporting?
The lender executes and records a satisfaction of mortgage and returns the note to the borrower.
When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage?
Recaptured depreciation
When an investment property is sold, three taxes that apply are transfer tax, capital gains and ______.
Freddie Mac
Which of the following entities buys loans primarily through thrifts?
A certificate of deposit
Which of the following would be the best place to keep monies intended for long-term savings?
To roll the cost of rehabilitating the purchased home into the mortgage
Why might a homebuyer use an FHA 203(k) loan instead of the standard 203(b) loan?
Community Reinvestment Act
Which federal lending act requires lenders to invest in development and rehabilitation efforts that enable low- and moderate-income individuals and families to afford a home?
Amortized
Which mortgage type is characterized by debt being paid off with relatively constant periodic payments consisting of interest and principal?
Local credit union
Which of the following entities commonly acts in the primary market?
Paying down outstanding credit card debt
Which of the following is the best investment for a licensee?
