Champions Real Estate Finance Exam Questions and Answers 2024, Exams of Real Estate Management

Download Champions Real Estate Finance Exam Questions and Answers 2024 and more Exams Real Estate Management in PDF only on Docsity! 1 Champions Real Estate Finance Exam Questions and Answers 2024 The minimum downpayment on a VA loan is: (a) 2% of the sales price (b) 0% of the sales price (c) 3.75% of the sales price (d) 1% of the sales price - Correct Answer-B _________ is the process of creating a new mortgage loan. (a) Origination (b) Funding (c) Underwriting (d) Servicing * - Correct Answer-A A veteran can have more than one VA loan: (a) If the prior VA loan was paid in full and the property disposed of (b) The prior VA loan was assumed by an eligible veteran who substituted their entitlement (c) A or B (d) Under no circumstances - a VA loan is a "once in a lifetime" benefit * - Correct Answer-C _________ are not-for-profit organizations that exist to serve their members. (a) Mortgage companies (b) Credit unions (c) Insurance companies 2 (d) One that cannot be financed - Correct Answer-B A qualifying ratio that compares the borrower's proposed house payment to their gross monthly income is the __________. (a) Back ratio (b) Appraisal ratio (c) Front ratio (d) Loan to value ratio - Correct Answer-C Periodic payment amounts such as principal & interest, estimated escrow, estimated monthly payment, and __________ must be disclosed in the Projected Payments section of the Loan Estimate form. (a) Mortgage Insurance (b) Homeowner's insurance (c) Property value (d) Estimated inspection cost - Correct Answer-A ___________ relates to Federal Government spending. (a) Monetary policy (b) Legislative policy (c) Reserve requirement (d) Fiscal policy - Correct Answer-D In the Closing Disclosure, prepaids include homeowner's and mortgage insurance premiums, prepaid interest, property taxes, and a maximum of __________ additional items. (a) 13 (b) 3 (c) 7 (d) 9 - Correct Answer-B 5 The _________ is the central banking system of the United States. (a) Federal Deposit Insurance Company (b) The U.S. Treasury (c) The U.S. Mint (d) The Federal Reserve - Correct Answer-D The three major national credit reporting agencies are, Experian, Equifax and _________. (a) TransAtlantic (b) Union Pacific (c) Transtar (d) TransUnion - Correct Answer-D Because it is a gift, the lender and/or the agent can provide gift funds to the borrower to be used as a down payment on an FHA loan. (a) True (b) False - Correct Answer-B The two major purchasers of mortgages in the secondary market are: (a) Freddie Mac and Ginnie Mae (b) Fannie Mae and Freddie Mac (c) Ginne Mae and Fannie Mae (d) FHFA and HECM - Correct Answer-B If a borrower is in default, the mortgage servicer may start the _________ process. (a) Forestalling (b) Closing (c) Casting 6 (d) Foreclosure - Correct Answer-D A collateral-dependent loan is also known as a __________. (a) Title loan (b) Cash advance (c) Hard money loan (d) Payment option loan - Correct Answer-C Lenders bear less risk in making an FHA loan because the FHA: (a) Borrowers generally have higher than average income and credit (b) Requires a substantial down payment that minimizes risk (c) Is default insurance that will pay a claim to a lender in the event of default (d) Requires that the borrower have a higher credit score than other programs - Correct Answer-C While some expenses may be paid in the form of a seller contribution or other means, the borrower actually must have the funds on hand for the: (a) Downpayment (b) Appraisal fee (c) Points (d) Brokerage fee - Correct Answer-A FHA loans are available for: (a) Single family homes (b) Multifamily properties (c) Manufactured homes (d) All of the above - Correct Answer-D 7 An ARM that offers a fixed-rate period during the first years of the loan usually has an initial adjustment cap that is higher than the per adjustment cap. (a) True (b) False - Correct Answer-A _________ is defined as the sum of currency held by the public and transaction deposits at depository institutions. (a) M1 (b) M2 (c) M3 (d) MI-5 - Correct Answer-A The _________ is where borrowers and mortgage lenders come together to create and negotiate the terms of a mortgage transaction. (a) Money market (b) Credit market (c) Primary market (d) Secondary market - Correct Answer-C A home was built 30 years ago, but is much like a home that is 10 years old, based upon its condition. In the appraisal, ten years is the home's ___________. (a) Useful life (b) Effective age (c) Chronological age (d) Depreciated age - Correct Answer-B The process of making a lending decision is known as ___________. (a) Processing (b) Applying 10 (c) Settlement (d) Foreclosure - Correct Answer-A _________ or re-amortizing a mortgage can reduce the borrower's monthly payment, making a default situation more manageable. (a) Forecasting (b) Recasting (c) Forebearance (d) Foreclosure - Correct Answer-B A portfolio loan is: (a) An FHA loan sold in the secondary market (b) A loan not sold into the secondary market, but retained by the lender (c) A conventional loan sold to Freddie Mac (d) A construction to permanent loan sold in the primary market - Correct Answer-B The value applied to a property for ad valorem tax purposes is the ___________. (a) Assessed value (b) Appraised value (c) Market value (d) Exchange value - Correct Answer-A An appraiser finds that, on average, rental homes in the area are selling for $166,900. Average rents are $1575 per month. The appraiser is appraising a home with a projected gross rent of $1,520 per month. What is the value of the home using the gross rent multiplier? (a) $166,500 (b) $145,044 (c) $161,071 11 (d) $133,266 - Correct Answer-C The maximum loan to value ratio on an FHA loan is 90%. (a) True (b) False - Correct Answer-B A return that represents the money earned on an investment is called _________. (a) A Yield (b) A Stop (c) A Buffer (d) Liquidity - Correct Answer-A The State of Texas plays a role in affordable housing through: (a) TALCB (b) TREC (c) TDHCA (d) TDEC - Correct Answer-C If the marketing time in an appraisal is over six months, (a) It is not an issue because time is not a factor in valuation (b) It indicates a healthy market that is boosting property values (c) It suggests that the area is fully developed (d) It suggests that the market is slow enough to be a drag on property values - Correct Answer-D If a home was built 30 years ago, thirty years is the home's ___________. (a) Useful life (b) Effective age 12 (c) Chronological age (d) Depreciated age - Correct Answer-C An appropriate loan for a property in need of significant rehabilitation would be a(n): (a) Construction loan (b) Construction to permanent loan (c) Cash back to buyer loan (d) Permanent loan - Correct Answer-B Each consumer has three different credit scores from the three major credit reporting agencies because: (a) Some consumers use only one or two of the reporting agencies (b) Some consumers have locked their credit file (c) Not all creditors report to all of the agencies (d) Some of the credit reporting agencies are slow to update their records - Correct Answer-C At closing, none of the charges listed on the Loan Estimate can change. (a) True (b) False - Correct Answer-B Periodic payment amounts such as principal & interest, estimated escrow, estimated monthly payment, and ___________ must be disclosed in the Projected Payments section of the Loan Estimate form. (a) Mortgage insurance (b) Homeowner's insurance (c) Property value (d) Estimate inspection cost - Correct Answer-A The most common occurrences that can result in foreclosure include: 15 Parent Friend Seller Cash-out refinance - Correct Answer-Seller 16 Champions Real Estate Finance Exam Questions and Answers 2024