CALIFORNIA REAL ESTATE SALESPERSON EXAM WITH QUESTIONS
AND CORRECT ANSWERS GRADED A+// LATEST UPDATE 2024/2025
Acceleration Clause - CORRECT ANSWER : The clause in a
mortgage or deed of trust that can be enforced to make the entire debt
due immediately if the borrower defaults on an installment payment or
other covenant. (Pay now)
Adjustable Rate Mortgage (ARM) - CORRECT ANSWER : a
mortgage with an interest rate that increases or decreases during the life
of the loan
adjustment date - CORRECT ANSWER : The date the interest rate
changes on an adjustable-rate mortgage.
Amortization - CORRECT ANSWER : A method for computing equal
periodic payments for an installment loan. (Paid within certain range of
time)
amortization schedule - CORRECT ANSWER : A table showing
precisely how a loan will be repaid. It gives the required payment on
each payment date and a breakdown of the payment, showing how much
is interest and how much is repayment of principal.
Annual Percentage Rate (APR) - CORRECT ANSWER : Cost of
borrowing money on an annual basis; takes into account the interest rate
and other related fees on a loan.
,Application - CORRECT ANSWER : The form used to apply for a
mortgage loan, containing information about a borrower'a income,
savings, assets, debts, and more.
Appraisal - CORRECT ANSWER : A written justification of the price
paid for a property, primarily based on an analysis of comparable sales
of similar homes nearby.
appraised value - CORRECT ANSWER : An opinion of a property's
fair market value, based on an appraiser's knowledge, experience, and
analysis of the property. Since an appraisal is based primarily on
comparable sales, and the most recent sale is the one on the property in
question, the appraisal usually comes out at the purchase price.
Appraiser - CORRECT ANSWER : An individual qualified by
education, training, and experience to estimate the value of real property
and personal property. Although some appraisers work directly for
mortgage lenders, most are independent.
Appreciation - CORRECT ANSWER : increase in value over time
Assessed Value (AV) - CORRECT ANSWER : The valuation placed
on property by a public tax assessor for purposes of taxation.
Assessment - CORRECT ANSWER : The placing of a value on
property for the purpose of taxation.
,Assessor - CORRECT ANSWER : A public official who establishes
the value of a property for taxation purposes.
Asset - CORRECT ANSWER : item of value owned by a firm or an
individual
Assignment - CORRECT ANSWER : When ownership of your
mortgage is transferred from one company or individual to another, it is
called an assignment.
Assumable Mortgage - CORRECT ANSWER : A mortgage that can be
assumed by the buyer when a home is sold. Usually, the borrower must
"qualify" in order to assume the loan.
assumption - CORRECT ANSWER : The term applied when a buyer
assumes the seller's mortgage.
Balloon Mortgage - CORRECT ANSWER : A mortgage loan that
requires the remaining principal balance be paid at a specific point in
time. For example, a loan may be amortized as if it would be paid over a
thirty year period, but requires that at the end of the tenth year the entire
remaining balance must be paid.
Balloon Payment - CORRECT ANSWER : The final lump sum
payment that is due at the termination of a balloon mortgage.
, bankruptcy - CORRECT ANSWER : By filing in federal bankruptcy
court, an individual or individuals can restructure or relieve themselves
of debts and liabilities. Bankruptcies are of various types, but the most
common for an individual seem to be a "Chapter 7 No Asset"
bankruptcy which relieves the borrower of most types of debts. A
borrower cannot usually qualify for an "A" paper loan for a period of
two years after the bankruptcy has been discharged and requires the re-
establishment of an ability to repay debt.
Bill of sale - CORRECT ANSWER : A written document that transfers
title to personal property.
biweekly mortgage - CORRECT ANSWER : A mortgage in which you
make payments every two weeks instead of once a month. The basic
result is that instead of making twelve monthly payments during the
year, you make thirteen. The extra payment reduces the principal,
substantially reducing the time it takes to pay off a thirty year mortgage.
Note: there are independent companies that encourage you to set up bi-
weekly payment schedules with them on your thirty year mortgage.
They charge a set-up fee and a transfer fee for every payment. Your
funds are deposited into a trust account from which your monthly
payment is then made, and the excess funds then remain in the trust
account until enough has accrued to make the additional payment which
will then be paid to reduce your principle. You could save money by
doing the same thing yourself, plus you have to have faith that once you
transfer money to them that they will actually transfer your funds to your
lender.
bond market - CORRECT ANSWER : Usually refers to the daily
buying and selling of thirty year treasury bonds. Lenders follow this
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