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South Carolina Real Estate Exam (State Portion Only)
Practice Questions and Answers
The creditor should ascertain the preference of the _____ as to legal counsel relating to closing the loan
and insurance agent.
A) lender
B) seller
C) real estate agent
D) borrower - ANSWER✔✔-D) borrower
The assumption fee when assuming a loan in SC may not exceed _____.
A) 1% of the loan or $400, whichever is greater
B) 1/2% of the loan
C) $500
D) 1% of the loan or $400, whichever is less - ANSWER✔✔-D) 1% of the loan or $400, whichever is less
Loans that can be prepaid without penalty are those which are _____.
A) $150,000 or less
B) Residential mortgage loans of $150,000 or less
C) Investment mortgage loans of $150,000 or less
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D) Commercial mortgage loans of $150,000 or less - ANSWER✔✔-B) Residential mortgage loans of
$150,000 or less
No greater than _____ interest can be charged in South Carolina on loans that are agreed to orally.
A) 3%
B) 4%
C) 6%
D) 12% - ANSWER✔✔-C) 6%
In South Carolina, if a mortgage loan is written, the amount of interest that can be charged is _____.
A) no more than 6%
B) any amount agreed to by the parties
C) no more than 18%
D) not covered by this law - ANSWER✔✔-B) any amount agreed to by the parties
Federal law allows lenders to charge a pre-payment penalty on adjustable rate mortgages. How does this
affect borrowers in South Carolina?
A) Borrowers in South Carolina do not pay a pre-payment penalty on loans under $150,000 but federal
law takes precedence on ARMs
B) Although the federal law allows it, SC law does not allow a pre-payment penalty on ARMs
C) ARMs do not have a pre-payment penalty as long as the mortgage balance does not exceed $150,000
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D) ARMs do not have a pre-payment penalty as long as the mortgage balance does not exceed $250,000
- ANSWER✔✔-B) Although the federal law allows it, SC law does not allow a pre-payment penalty on
ARMs
In South Carolina, the law has set an assessment rate. What is the rate for RESIDENTIAL OWNER-
OCCUPIED property?
A) 4%
B) 6%
C) 9 1/2%
D) 10 1/2% - ANSWER✔✔-A) 4%
In South Carolina, the law has set an assessment rate. What is the rate for RENTAL NONOWNER-
OCCUPIED property?
A) 4%
B) 6%
C) 9 1/2%
D) 10 1/2% - ANSWER✔✔-B) 6%
A person who is over 65 years of age may get a break on his/her Ad Valorem tax. What is the nature of
this special treatment?
A) With application, his/her appraised value will be reduced by $50,000
B) His/her assessed value will be reduced by $50,000
C) With application, his/her assessed value will be reduced by $20,000
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D) With application, his/her appraised value will be reduced by $20,000 - ANSWER✔✔-A) With
application, his/her appraised value will be reduced by $50,000
The assessed value is $3,000 and the tax is based on 200 mills. How much is the tax?
A) $500
B) $600
C) $700
D) $800 - ANSWER✔✔-B) $600 [NOTE: ($3,000 assessed value)(0.200 mill rate) = $600 annual tax]
The assessor's appraisal was $67,900 on the rental house owned by the three little pigs. They sold it and
had a closing on August 18. What was the amount of taxes to be prorated at closing if the tax rate was
134 mills, the assessment rate was 6%, and the pigs agreed to pay through closing? (Use a 360 day year)
A) $300.75
B) $325.75
C) $345.75
D) $365.75 - ANSWER✔✔-C) $345.75 [NOTE: ($67,900 appraisal)(6% assessment rate on rental property)
= $4,074 assessed value. Then, ($4,074 assessed value)(0.134 mill rate) = $545.916 annual tax. Now
divide $545.916 by 360 days to get $1.51643/day. Because they closed on August 18th, there are 228
days from January 1st to August 18th. Therefore, ($1.51643/day)(228 days) = $345.75 in taxes.
A property was assessed for tax purposes at 80% of its $140,000 purchase price. Using a tax rate of 25.8
mills, what will the annual taxes be on the property?
A) $3,612.50
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