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Texas Real Estate Finance: Questions & Correct Answers
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Texas Real Estate Finance: Questions & Correct Answers
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Texas Real Estate Finance: Questions & CorrectAnswers
What is the formula for determining a borrower's total debt service ratio?
Right Ans - (PITI + Long Term Liabilities)/ Gross Monthly Income
Which of the following Statements is true of private mortgage insurance
(PMI)? Right Ans - It may be paid in a lump sum at closing, in some
instances.
At an adjustment period, the interest rate for an adjustable rate mortgage
(ARM) is determined by adding what to the index rate? Right Ans - Margin
When an appraiser conducts an appraisal using the cost approach, for which
things will he or she use the sales comparison approach to value? Right Ans
- Land
What is another term for negative amortization? Right Ans - Deferred
Interest
The Federal Housing Administration (FHA) is part of what other government
agency? Right Ans - Department of Housing and Urban Development
To determine the value of a highly specialized building, like a museum, an
appraiser would most likely use and heavily weight which of the following
appraisal methods? Right Ans - Cost Approach
What happens in the secondary market? Right Ans - Real Estate Loans are
bought and sold.
In Texas, which of the following is an executory contract? Right Ans -
Condominium Contract
Which of the following is true of a VA hybrid loan? Right Ans - It converts
to fixed rate loans after three years.
What is not part of the required lender disclosures? Right Ans - Number of
loans originated to women.
, What is the minimum down payment that allows a borrower to avoid buying
mortgage insurance premium (MIP)? Right Ans - 20%
Which calculations on the Closing Disclosure (aka HUD-1) form are usually
completed first? Right Ans - Settlement Charges
What effect does a debit to the seller have on charges made to the parties
involved in the transaction? Right Ans - Decreases the amount the seller
receives after closing."
Jerry sold his last home five years ago and moved into an apartment. Now
Jerry is thinking about buying a home and has seen some great programs for
first time home buyers. Will Jerry qualify as a "first time home buyer"? He has
owned no other real estate. Right Ans - Yes, because legally, anyone that
has not owned for three years is a first time home buyer.
What effect does a debit to the buyer have on charges made to the parties
involved in the transaction? Right Ans - Increases the amount due from the
buyer at closing.
What entity assembles mortgages into pools and issues pass through
certificates, multiclass bonds, or other securities to investors in the secondary
mortgage market? Right Ans - A REMIC
Which of the following is NOT one of the principal buyers of real estate loans
on the secondary market? Right Ans - Sallie Mae
The buyer of a $450,000 residential property obtains 80% loan. The seller,
who must pay off the $247,000 remaining on his mortgage, agrees to pay the
total 7% commission to the tow real estate firms involved. ABC Realty will
receive 4% commission and XYS Realty will receive 3% commission. What is
the dollar amount each real estate firm will receive from the sale? Right
Ans - $18,000 to ABC Realty; and $13,500 to XYZ Realty
When was the FHA created? Right Ans - 1934
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