FREE Real Estate Sales Financing and Mortgages Questions and Answers

Question 1

A homebuyer is purchasing a property for $400,000 and the lender has agreed to a loan with an 80% loan-to-value (LTV) ratio. What is the amount of the buyer's down payment?

Accepted Answer

$80,000

Answer

$40,000

Answer

$100,000

Answer

$320,000

Question 2

Which of the following federal laws requires lenders to provide borrowers with a clear disclosure of the total cost of credit, including the annual percentage rate (APR), before they enter into a credit transaction?

Accepted Answer

Truth in Lending Act (TILA)

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Fair Housing Act (FHA)

Answer

Equal Credit Opportunity Act (ECOA)

Question 3

A mortgage lender offers a local real estate agent a $500 gift card for every client they refer who closes a loan with the lender. This arrangement is a violation of which federal law?

Accepted Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Sherman Antitrust Act

Answer

Fair Housing Act

Answer

Truth in Lending Act (TILA)

Question 4

A borrower secures a loan where for the first five years, the monthly payments only cover the interest. At the end of the five years, the entire principal balance is due in a single payment. What type of loan is this?

Accepted Answer

Interest-only loan

Answer

Fully amortized loan

Answer

Graduated payment mortgage

Answer

Adjustable-rate mortgage

Question 5

Which of the following is a key characteristic of a Federal Housing Administration (FHA) insured loan?

Accepted Answer

It is insured by the government to protect the lender against borrower default.

Answer

It is available only to veterans and their spouses.

Answer

It requires a minimum 20% down payment.

Answer

It is a direct loan from the federal government to the borrower.

Question 6

The practice of charging an interest rate on a loan that is higher than the maximum rate permitted by state law is known as:

Accepted Answer

Usury

Answer

Redlining

Answer

Amortization

Answer

Subordination

A homebuyer is purchasing a property for $400,000 and the lender has agreed to a loan with an 80% loan-to-value (LTV) ratio.What is the amount of the buyer's down payment?

A homebuyer is purchasing a property for $400,000 and the lender has agreed to a loan with an 80% loan-to-value (LTV) ratio.
What is the amount of the buyer's down payment?