Question 1

When should a purchase money mortgage properly be recorded?

Accepted Answer

A)  Before the deed 
B)  After the deed 
C)  At the same moment as the deed 
D)  Upon full payment 
A)  Before the deed 
B)  After the deed 
C)  At the same moment as the deed 
D)  Upon full payment

Question 2

A mortgage taken by a seller from the buyer in part payment of the purchase price of real estate is known as

Accepted Answer

A)  seller financing. 
B)  a conflict of interest. 
C)  usury. 
D)  a second trust deed. 
A)  seller financing. 
B)  a conflict of interest. 
C)  usury. 
D)  a second trust deed.

Question 3

With a ____________________ mortgage, the lender makes monthly payments to the homeowner.

Accepted Answer

The answer of With a ____________________ mortgage, the lender makes...

Question 4

Equity sharing is based on the concept of someone who has assets sharing those assets in exchange for

Accepted Answer

A)  a share of the ownership. 
B)  tax benefits. 
C)  both a and b. 
D)  neither a nor b. 
A)  a share of the ownership. 
B)  tax benefits. 
C)  both a and b. 
D)  neither a nor b.

Question 5

Choose the one most appropriate answer for each.
-a loan wherein the lender makes monthly payments to the property owner who later repays in a lump sum

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 6

With a purchase made by an installment contract or land contract title immediately passes to the purchaser.

Accepted Answer

A) True 
 B)False

Question 7

An individual who is contemplating the purchase of a mortgage as an investment should have

Accepted Answer

A)  the property appraised. 
B)  a credit check made on the borrower. 
C)  the title searched. 
D)  all of the above. 
A)  the property appraised. 
B)  a credit check made on the borrower. 
C)  the title searched. 
D)  all of the above.

Question 8

A builder bought all 20 lots in a subdivision from the developer, who carried most of the purchase price on one loan. To sell the lots, he must include a

Accepted Answer

A)  reverse loan clause. 
B)  sale-lease back clause. 
C)  package mortgage clause. 
D)  partial release clause. 
A)  reverse loan clause. 
B)  sale-lease back clause. 
C)  package mortgage clause. 
D)  partial release clause.

Question 9

The phrase "taking back paper" applies to

Accepted Answer

A)  a cash sale. 
B)  conventional loans. 
C)  VA loans. 
D)  seller financing. 
A)  a cash sale. 
B)  conventional loans. 
C)  VA loans. 
D)  seller financing.

Question 10

ARM loans with teaser rates are avoided by

Accepted Answer

A)  mortgage insurers. 
B)  secondary market buyers. 
C)  both a and b. 
D)  neither a nor b. 
A)  mortgage insurers. 
B)  secondary market buyers. 
C)  both a and b. 
D)  neither a nor b.

Question 11

Choose the one most appropriate answer for each.
-an arrangement whereby a party providing financing gets a portion of the ownership

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 12

Choose the one most appropriate answer for each.
-a debt instrument that encompasses existing mortgages and in subordinate to them

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 13

For the borrower there are no disadvantages to an ARM loan.

Accepted Answer

A) True 
 B)False

Question 14

A loan arrangement whereby a lender extends a line of credit is

Accepted Answer

A)  a buy-down mortgage. 
B)  an open-end mortgage. 
C)  a wraparound mortgage. 
D)  a purchase money mortgage. 
A)  a buy-down mortgage. 
B)  an open-end mortgage. 
C)  a wraparound mortgage. 
D)  a purchase money mortgage.

Question 15

The objective of a graduated payment mortgage is to help borrowers pay off their loans more rapidly.

Accepted Answer

A) True 
 B)False

Question 16

With the ____________________ payment mortgage, the interest rate and maturity are fixed but the monthly payment gradually rises.

Accepted Answer

The answer of With the ____________________ payment mortgage, the interest...

Question 17

Choose the one most appropriate answer for each.
-the amount of time that elapses between interest rate changes on a loan

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 18

Choose the one most appropriate answer for each.
-a limit on how much a borrower's payment can increase in any one year

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 19

Choose the one most appropriate answer for each.
-a payment by the seller to the lender in order to reduce the interest for the buyer

Accepted Answer

A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage 
A) adjustment period 
B) adjustable rate mortgage (ARM) 
C) blanket mortgage 
D) blended-rate loan 
E) buy-down mortgage
F)carryback financing
G)contract for deed
H)equity mortgage
I)equity sharing
J)graduated payment mortgage
K)interest rate cap
L)negative amortization
M)option
N)overencumbered property
O)package mortgage
P)payment cap
Q)reverse mortgage
R)sale and leaseback
S)subordination
T)wraparound mortgage

Question 20

The most popular index is the local bank prime rate.

Accepted Answer

A) True 
 B)False

Exam 13: Types of Financing

When should a purchase money mortgage properly be recorded?

A mortgage taken by a seller from the buyer in part payment of the purchase price of real estate is known as

With a ____________________ mortgage, the lender makes monthly payments to the homeowner.

Equity sharing is based on the concept of someone who has assets sharing those assets in exchange for

Choose the one most appropriate answer for each. -a loan wherein the lender makes monthly payments to the property owner who later repays in a lump sum

With a purchase made by an installment contract or land contract title immediately passes to the purchaser.

An individual who is contemplating the purchase of a mortgage as an investment should have

A builder bought all 20 lots in a subdivision from the developer, who carried most of the purchase price on one loan. To sell the lots, he must include a

The phrase "taking back paper" applies to

ARM loans with teaser rates are avoided by

Choose the one most appropriate answer for each. -an arrangement whereby a party providing financing gets a portion of the ownership

Choose the one most appropriate answer for each. -a debt instrument that encompasses existing mortgages and in subordinate to them

For the borrower there are no disadvantages to an ARM loan.

A loan arrangement whereby a lender extends a line of credit is

The objective of a graduated payment mortgage is to help borrowers pay off their loans more rapidly.

With the ____________________ payment mortgage, the interest rate and maturity are fixed but the monthly payment gradually rises.

Choose the one most appropriate answer for each. -the amount of time that elapses between interest rate changes on a loan

Choose the one most appropriate answer for each. -a limit on how much a borrower's payment can increase in any one year

Choose the one most appropriate answer for each. -a payment by the seller to the lender in order to reduce the interest for the buyer

The most popular index is the local bank prime rate.

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Sources of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

Investing in Real Estate

Filters