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Question 1 of 10
1. Question
A home buyer borrows $280,000 at an interest rate of 7 percent to purchase a home for 30 years. How much interest will he pay on the loan for
the first year?Correct
Interest on a mortgage loan is determined as follows: Total lent amount = Interest rate.
Incorrect
Interest on a mortgage loan is determined as follows: Total lent amount = Interest rate.
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Question 2 of 10
2. Question
Which of the following statements about California Law is true?
Correct
If the selling of the property can not cover the unpaid mortgage balance, the California Law protects and governs the initial loan used to buy the home.
Incorrect
If the selling of the property can not cover the unpaid mortgage balance, the California Law protects and governs the initial loan used to buy the home.
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Question 3 of 10
3. Question
A buyer wants a house that costs $330,000 to purchase. At a loan-to-value ratio of 80%, the bank offers a mortgage loan. How much is the buyer going to need for a down payment?
Correct
The amount the bank is going to lend is the percent quoted as the loan-to-value (LTV) ratio. The remaining is what is for the down payment is. 100% (purchase price)-80% LTV = 20% down payment $330,000 (purchase price) x 0.20 (down payment) = $66,000 (down payment) (cash needed)
Incorrect
The amount the bank is going to lend is the percent quoted as the loan-to-value (LTV) ratio. The remaining is what is for the down payment is. 100% (purchase price)-80% LTV = 20% down payment $330,000 (purchase price) x 0.20 (down payment) = $66,000 (down payment) (cash needed)
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Question 4 of 10
4. Question
What does a discount point do to a mortgage loan for the successful yield a lender receives?
Correct
Discount points boost the lender’s yield above that of the stated interest rate, so if points were charged to secure a 6% loan, the bank’s yield would be more than 6%. How much more depends on the number of points being billed.
Incorrect
Discount points boost the lender’s yield above that of the stated interest rate, so if points were charged to secure a 6% loan, the bank’s yield would be more than 6%. How much more depends on the number of points being billed.
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Question 5 of 10
5. Question
Equity is most accurately defined as?
Correct
Although the sale price of a house minus the value of the mortgage and the quantity of the down payment will be right at the time of sale, if the sale price equals the value, the most precise choice is the house value minus all liens and burdens.
Incorrect
Although the sale price of a house minus the value of the mortgage and the quantity of the down payment will be right at the time of sale, if the sale price equals the value, the most precise choice is the house value minus all liens and burdens.
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Question 6 of 10
6. Question
Which of the following statements about regulation z is correct?
Correct
Regulation Z, is the legislation that regulates real estate loan ads and is also known as the Truth in Lending Act, which deals with what data must appear in ads for real estate loans.
Incorrect
Regulation Z, is the legislation that regulates real estate loan ads and is also known as the Truth in Lending Act, which deals with what data must appear in ads for real estate loans.
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Question 7 of 10
7. Question
In addition to mortgage payments, a mortgage lender allows a borrower to make regular payments to a special account to cover taxes and liability insurance premiums for the house. This kind of account is generally known as?
Correct
This is conclusive and it makes up the other options for answers.
Incorrect
This is conclusive and it makes up the other options for answers.
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Question 8 of 10
8. Question
Select from the following statements about California for VA and FHA loan programs that provide incorrect description.
Correct
In other parts of the world where mortgage money may not be readily available, direct loans may be made, but not in California.
Incorrect
In other parts of the world where mortgage money may not be readily available, direct loans may be made, but not in California.
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Question 9 of 10
9. Question
Which of the following statements about amortization is true?
Correct
In the early years of the loan, the graduated-payment mortgage loan has lower payments and does not cover the full payment of principal and interest, thus contributing to the loan sum outstanding charges.
Incorrect
In the early years of the loan, the graduated-payment mortgage loan has lower payments and does not cover the full payment of principal and interest, thus contributing to the loan sum outstanding charges.
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Question 10 of 10
10. Question
A type of purchase financing that allows the seller to immediately take possession of the land, but delays the transfer of title is?
Correct
Another term for same purchase financing arrangement are lease on ground, deed bond, and sales contract for an installment.
Incorrect
Another term for same purchase financing arrangement are lease on ground, deed bond, and sales contract for an installment.