Property Valuation and Financing Flashcards
7 cards from real Wisconsin Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Property Valuation and Financing flashcards as text
The secondary mortgage market primarily serves to:
Answer: Buy loans from lenders to provide liquidity
The secondary market buys existing loans from originators, giving lenders funds to make more loans.
Which entity is a major participant in the secondary mortgage market?
Answer: Fannie Mae
Fannie Mae purchases and securitizes mortgages, making it a key secondary-market player.
A gross rent multiplier (GRM) is calculated by dividing sale price by:
Answer: Gross monthly (or annual) rent
GRM equals the sale price divided by the property's gross rental income.
If a home sold for $200,000 and its gross monthly rent is $2,000, what is the monthly GRM?
Answer: 100
GRM equals $200,000 divided by $2,000, which is 100.
An appraiser reconciles the three approaches to value by:
Answer: Weighing them to form a final opinion of value
Reconciliation weighs each approach based on reliability to reach a final value opinion, not a simple average.
Loss in value caused by factors outside the property, such as a nearby freeway, is:
Answer: External (economic) obsolescence
External obsolescence is a loss in value from negative influences outside the property boundaries.
Which factor most directly influences a buyer's mortgage qualification based on their income?
Answer: Debt-to-income ratio
The debt-to-income ratio compares a borrower's debt obligations to income to assess loan qualification.