Real Estate Finance ICHAMPIONS 100% VERIFIED ANSWERS 2024/2025 CORRECT, Exams of Finance

Download Real Estate Finance ICHAMPIONS 100% VERIFIED ANSWERS 2024/2025 CORRECT and more Exams Finance in PDF only on Docsity! Real Estate Finance I- CHAMPIONS 100% VERIFIED ANSWERS 2024/2025 CORRECT 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 B _________ is the process of creating a new mortgage loan. (a) Origination (b) Funding (c) Underwriting (d) Servicing * 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 * C _________ are not-for-profit organizations that exist to serve their members. (a) Mortgage companies (b) Credit unions (c) Insurance companies (d) One that cannot be financed B A qualifying ratio that compares the borrower's proposed house payment to their gross monthly income is the __________. (a) Back ratio (c) FHA loans require a minimum 5% down payment (d) FHA loans are for low income borrowers only B The age of a property based upon the appraiser's assessment of the property's maintenance and upgrades is its __________. (a) Useful life (b) Market age (c) Chronological age (d) Effective age D In an ARM, the index: (a) Is controlled by the lender (b) Is controlled by the borrower (c) Varies with fluctuations in financial markets (d) Is chosen by the lender on the adjustment date C The loan to value ratio is: (a) The minimum down payment (b) The percentage of value that a lender is willing to finance (c) Set by HUD on all loans (d) Based upon the assessed value of the property B An amortizing loan is: (a) A loan whose payment includes both principal and interest (b) A straight loan requiring interest only payments (c) A wraparound loan (d) A loan that includes both real and personal property A Escrow of taxes and insurance is required for FHA loans: (a) With a LTV of 90% or greater (b) Made to borrowers with a credit score under 600 (c) Always - all FHA loans require escrow of taxes and insurance (d) Unless the borrower agrees to pay an escrow waiver fee C A claim, lien, charge, or liability attached to and binding real property is a(n) __________. (a) Clause (b) Easement (c) Encumbrance (d) Conveyance C FHA requires a down payment of: (a) 0% (b) 3.50% (c) 5% (d) 5.50% B 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 (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 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 A FHA loans are available for: (a) Single family homes (b) Multifamily properties (c) Manufactured homes (d) All of the above D 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 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 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 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 B The process of making a lending decision is known as ___________. (a) Processing (b) Applying (c) Underwriting (d) Credit Scoring C In the Loan Estimate, the Comparisons Table: (a) Displays offers from multiple lenders (b) Provides information to the borrower used to compare loan offers from different lenders The most probable sale price of a property is known as: (a) Net Price (b) Market Value (c) Contract Price (d) Assessed Value B There are _________ Federal Home Loan Banks in the United States. (a) Twelve (b) Twenty four (c) Sixteen (d) Fifty A A(n) _________ is a right given by law to creditors to have debts paid out of the property of a defaulting debtor. (a) Lien (b) Interest (c) Settlement (d) Foreclosure 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 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 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 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 (d) $133,266 C The maximum loan to value ratio on an FHA loan is 90%. (a) True (b) False B A return that represents the money earned on an investment is called _________. (a) A Yield (d) Some of the credit reporting agencies are slow to update their records C At closing, none of the charges listed on the Loan Estimate can change. (a) True (b) False 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 A The most common occurrences that can result in foreclosure include: (a) Payment delinquency (b) Failure to maintain the mortgaged property (c) Failure to repay property taxes (d) All of the choices are correct D A strict foreclosure is one in which the ____________ files suit on the homeowner in default. (a) Seller (b) Lender (c) State government (d) Federal government B For the borrower planning to remain in his/her home in the long term, or the borrower who is adverse to risk, the best choice in a mortgage would probably be: (a) A reverse mortgage (b) An adjustable rate mortgage (c) An interest-only loan (d) A fixed-rate mortgage D The Closing Information section of the Closing Disclosure form includes the date issued, the disbursement and closing dates, the address or location of the property, the value, and the ____________ name and file number. (a) Listing agent's (b) Broker's (c) Buyer's (d) Settlement agent's D _________ was established in 1970 for the purpose of purchasing mortgages in the secondary market. (a) Fannie Mae (b) Farmer Mac (c) Ginnie Mae (d) Freddie Mac D The fixed rate charged on an adjustable rate mortgage until the first adjustment date is known as the ___________. (a) Prime rate (b) Index rate (c) Initial rate