California Real Estate Salesperson Exam Part 2 //with
questions and correct answers //latest update 2024/2025
secondary market - CORRECT ANSWER : The Federal
National Mortgage Association(Fannie Mae) and the Federal
Home Loan Mortgage Corporation(Freddie Mac, are
government sponsored entities(gse's) that together provide a
_________________ for residential mortgages.
Federal Housing Administration (FHA) - CORRECT
ANSWER : The _________________________provides
insurance to approved lenders against losses on residential
mortgage loans.
FHA Loan - CORRECT ANSWER : An ____ loan is more
expensive for the borrower than a conventional, VA, or Cal-Vet
loan.
VA (US Dept. of Veterans Affairs) - CORRECT ANSWER :
The ____ guarantees part of a loan made to a veteran.
VA (US Dept. of Veterans Affairs) - CORRECT ANSWER :
A ____ loan typically has no down payment; FHA and Cal-Vet
loans do.
,FHA and VA - CORRECT ANSWER : ____________ loans
can be used to buy 1-4 family residential properties, but they
must be owner occupied (can be rented later).
Cal-Vet (California Department of Veterans Affairs) -
CORRECT ANSWER : A ________ loan is unique. It
purchases residential properties selected by veterans that are
then sold to veterans on land contracts(installment sales
contract) as the security property. Legal title is held by the
department until the loan is paid off. the program is financed by
the sale of tax free bonds by the State of California; Interest
rates are set by the Legislature based on the cost of funding.
CalHFA (California Housing Finance Agency) - CORRECT
ANSWER : _________ finances mortgage loans to low and
moderate income first time homebuyers. These loans are funded
by the sale of tax free bonds and made through approved private
lenders.
mortgage - CORRECT ANSWER : A ___________ is the
general term for any loan on real property.
promissory note; security installment - CORRECT ANSWER :
To create a mortgage, the borrower signs a _________________
and a ___________________ that creates a lien on the property.
,deed of trust - CORRECT ANSWER : In California the
security instrument used is a _________________, in some
other states a traditional mortgage is used, which must be
foreclosed in court.
default - CORRECT ANSWER : A ________ is a failure to
pay a debt, fulfill a duty or promise, or an omission or failure to
perform some required act.
secured loan - CORRECT ANSWER : When the loan is a
_____________, the lender has a security interest in the debtors
property put up as collateral for the loan.
promissory note - CORRECT ANSWER : A
_________________ is a written promise to pay money, the
actual evidence of the debt.
straight note - CORRECT ANSWER : In a ______________
no principal payments are made during the term; instead the
borrower repays the entire principal in a lump sum at maturity;
the interest can be paid in installments or at maturity.
fully amortized loans - CORRECT ANSWER : In a
__________________, the loan is completely repaid, interest
, and principal, by a series of regular payments over the term;
amortization is the liquidation of a financial obligation on an
installment basis. Home loans are typically like this.
level payment loan - CORRECT ANSWER : A
__________________ is an amortized loan that is paid off by a
series of equal payments of principal and interest; in a level
payment loan the portion of each payment applied to the
principal increases with each payment because loan is being
paid down and, so, the portion applied to interest is always
decreasing.
balloon loan - CORRECT ANSWER : A _____________ is
only partially amortized and the final payment discharging the
debt at maturity is significantly larger than the other installment
payments. Commercial loans typically have shorter terms than
home loans and are often only partially amortized(paid down) at
maturity.
construction loan - CORRECT ANSWER : A
_______________ is a short term, interim loan, made to finance
the construction of a new building or other improvement on the
land; Funds are usually dispersed in separate draws as the
construction progresses.
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