Finance Exam Review: Questions and Answers on Mortgages and Loans, Exams of Finance

Download Finance Exam Review: Questions and Answers on Mortgages and Loans and more Exams Finance in PDF only on Docsity! Finance - Review Exam test for the end year candidates.all questions with answers below  Discount Points are figured on the: o Selling Price o Loan Balance o Salary of buyer o None of the above. - Correct answer b. Loan Balance  Which of the following is shown on an estoppel certificate? o Unpaid balance and interest rate on mortgage. o Time of foreclosure o Novation of the seller. o Any defects in the title. - Correct answer a. Unpaid balance and interest rate on mortgage.  Insurance on an FHA loan is designed to protect the: o Government o Lender o Borrower o Seller - Correct answer b. Lender  If given the choice, it's best if the Buyer assumes an existing loan: o Assumption of o Subject to o Buy Down o None of the above. - Correct answer b. Subject to  Two discount points charged on an FHA loan of $50,000 would amount to: o $500 o $700 o $1,000 o $2,000 - Correct answer c. $1,000  To compute the dollar value of a loan discount, each point is equal to: o 1% of the amount to be loaned. o 1% of the down payment. o 1% of the appraised value. o 1% of the sales price. - Correct answer a. 1% of the amount to be loaned.  The document from a lender that gives the status of the loan such as loan balance, interest, time remaining and note is the: o Loan certificate o Estoppel certificate o Equity certificate o All inclusive rate. o Variable rate. - Correct answer d. Variable rate.  In a loan having a balloon payment: o The last payment has a higher interest rate than previous payments. o The last payment is larger than previous payments. o The last payment is principal only. o Only interest is paid until the last payment. - Correct answer b. The last payment is larger than previous payments.  A construction loan is considered to be: o A Take Out Loan. o A Low Risk Loan. o An Interim Loan. o A Secondary Loan. - Correct answer c. An Interim Loan.  Failure to meet an obligation when due is as: o Duress. o Deficiency. o Default. o Defeasance. - Correct answer c. Default.  The borrower has the right to redeem the property after it has been sold to another at the sheriff's sale. This is called the: o Redemption period. o Equitable Redemption. o Statutory Redemption. o Equity Redemption. - Correct answer c. Statutory Redemption.  Foreclosure where there is no court action is an example of: o Confession of judgment. o Executory process. o Judgment. o Ordinary. - Correct answer b. Executory process.  The proceeding where a property must be appraised and should sell for 2/3 of the appraised value is known as: o Ordinary process. o Confession of judgment. o Executory process. o Judgment. - Correct answer a. Ordinary process.  The percentage borrowed in relation to the appraised price would be the: o Equity rate. o Loan to value ratio. o Assessment rate. o Interest rate. - Correct answer b. Loan to value ratio.  Ginnie Mae provides funds for: o VA, FHA and Conventional Loans o Savings and Loan Associations o Low income housing o All of the above. - Correct answer c. Low income housing  If a lender holding a note for $58,000 sold it to a second lender for $50,000, his action would be known as: o Refinancing o Discounting o Depreciating o Hypothecating - Correct answer b. Discounting  Together Fannie Mae, Ginnie Mae, and Freddie Mac: o Securer loans originated by savings and loan associations. o Regulate the low cost housing market. o Provide a place for primary lenders to sell loans. o Provide mortgage insurance for primary lenders. - Correct answer c. Provide a place for primary lenders to sell loans.  The Federal National Mortgage Association can do ALL but which one of the following: o Purchase conventional loans o Sell mortgages to institutions. o Buy FHA-VA loans