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IL CH8 Basic Review Estate Concepts Review Questions

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Insurance for the protection of lending institutions making conventional loans is called:

A. mutual mortgage insurance
B. conventional mortgage insurance
C. institutional insurance
D. private mortgage insurance
D. private mortgage insurance
The FHA programs are for:

A. making housing loans
B. guaranteeing housing loans
C. purchasing housing loans
D. insuring housing loans
C. purchasing housing loans
The FHA bases its commitment on a percentage of:

A. certificate of reasonable value
B. purchase price
C. selling price
D. acquisition cost
D. acquisition cost
Which of the following FHA programs provides for lower monthly payments in the early years of the mortgage term by not requiring the borrower to pay all the interest at the time?

A. 203(b)
B. 203(b)(2)
C. 234 (c)
D. 245
D. 245
Which of the following statements about VA loans is correct?

A. repayment of 100 percent of VA loans in the event of borrower default is guarenteed to the lender
B. VA loans may be for 100 percent of the property value established by the
B. VA loans may be for 100 percent of the property value established by the VA
All of the following statements about FHA and VA loans are correct EXCEPT:

A. they are assumable with qualifying
B. the require a prepayment penalty
C. the maximum term is 30 years
D. they require an escrow account
B. the require a prepayment penalty
Which of the following statements about discount points is correct?

A. points increase the lender's yield on the loan
B. each point charged by the lender costs 1 percent of the loan amount
C. buyers can pay points on VA, FHA, and con
D. all of the above
All of the following statements about Regulation Z are correct EXCEPT:

A. it applies to commercial mortgage loans
B. it requires lenders to furnish a disclosure statement to the borrower
C. it provides for a three-day right of receis
A. it applies to commercial mortgage loans
RESPA requires the lender to furnish the borrower all of the following EXCEPT:

A. homebuyer's guide to settlement costs
B. good faith estimate
C. standard settlement form
D. three-day right of rescission
D. three-day right of rescission
ECOA requires lenders to make consumer loans without regard to all of the following EXCEPT:

A. age
B. occupation
C. gender
D. marital status
B. occupation
The type of mortgage requiring the borrower to pay only interest during the mortgage term is:

A. balloon
B. open
C. term
D. closed
C. term
The amount of interest paid in an amortizing mortgage for a month in which the principle balance is $73,000 and the rate is 12 percent is:

A. $876
B. $730
C. $600
D. 1,369
B. $730
A mortgage that is not on a fully amortizing basisi and, therefore, requires a larger final payment is called:

A. graduated mortgage
B. balloon mortgage
C. open mortage
D. flexible mortage
B. balloon mortgage
The type of mortgage in which the lender reduces the interest rate for a part of the profit realized when the property is sold is a:

A. participation mortgage
B. price-level adjusted mortgage
C. wraparound mortage
D. shared appr
D. shared appreciation
A mortgage in which two or more parcels of land are pledged is called:

A. blanket
B. package
C. all-inclusive
D. wrap around
A. blanket
A mortgage that is subordinate to another is called:

A. leasehold
B. blanket
C. junior
D. participation
C. junior
A mortgage given by buyer to seller to secure payment of part of the purchase price is a(n):

A. purchase money mortgage
B. earnest money mortgage
C. participation mortgage
D. graduated payment mortgage
A. purchase money mortgage
Which of the following statements regarding wraparound mortgages is true? (2 answers are correct)

A. it is a junior mortgage in an amount larger than the existing first mortgage
B. it is not necessary the the existing first mortgage is as
C. both a and b are true
A lender is making loans at 7.25 percent. If a borrower desired a 7 percent loan, how many points would the buyer have to pay?

A. one
B. two
C. four
D. eight
B. two
Which of the following would be considered an advertising trigger term under Regulation Z?

A. low down payment
B. easy monthly payment
C. VA and FHA financing available
D. 10 percent down
D. 10 percent down
The loan with the highest LTVR is a(n):

A. FHA loan
B. VA loan
C. conventional loan
D. adjustable loan
B. VA loan
The government agency responsible for the enforcement of RESPA is the:

A. OBRE
B. FHA
C. FTC
D. HUD
D. HUD
A financing technique, usually (but not always), employed by builders, used to lower the effective interest rate paid by the home buyer that results in lower monthly payments for a set period of time is called a(n):

A. disintermediation loan
D. buy-down mortgage
Which of the following is NOT covered by RESPA?

A. a first or second mortgage secured by residential property
B. a commercial loan
C. reverse mortgages on residential property
D. equity lines of credit backed by residential prop
B. a commercial loan
Which of the following MIGHT NOT be covered by RESPA?

A. time-shares in residential property
B. a residential condominium
C. a residential cooperative
D. construction loan on a residential property
D. construction loan on a residential property
Which of the following is NOT covered by RESPA?

A. VA loans
B. FHS loans
C. sale of a mobile home attached to a lot
D. sale of a land parcel of 25 acres or more
D. sale of a land parcel of 25 acres or more

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