REAL ESTATE FINANCE FINAL PAPER 2026
QUESTIONS WITH ANSWERS GRADED A+
◉ budget mortgage. Answer: The ______ _____ requires equal
payments to be made by the borrower to cover principle and
interest for the life of the loan.
◉ Construction mortgage. Answer: ___ _____ sometimes called an
'interim loan' or interim financing'
◉ Reverse annuity mortgage. Answer: ___ ____ ____:a loan that allows
a homeowner over the age of 62 to borrow against the equity in his
home and not repay the loan until he no longer occupies the
property
◉ Term or straight loan. Answer: ____ ___ ____ ____: a loan where the
borrower pays interest only for a limited amount of time and at the
end of the term, the principle is due.
◉ Package mortgage. Answer: ____ ____: permits a home buyer to
borrow money from a single lender, not only on the value of the land
and improvements, but also on the value of equipment, such as
appliances
,◉ purchase money mortgage. Answer: ______ ______ ______ can be
structured many ways. :fixed rate; adjustable rate; balloon
◉ Balloon mortgage. Answer: with a ______ __, the amortized payment
of a mortgage remains constant over the period of the loan but
leaves an outstanding balance to be paid at the end of the term.
◉ Wraparound mortgage. Answer: ______ ____ new financing is
wrapped around the existing mortgage. It is illegal for real estate
agents to write contracts with this financing.
◉ lien theory. Answer: Texas is a ____ _____ state.
◉ mortgager(borrower), mortgagee(lender) and Trustee. Answer:
In a Deed of trust there are 3 parties involved: ________ _____ _____
◉ to release the lien when the debt is paid, and foreclose in the
event of default. Answer: Duties of the trustee are __ ____ ___ __ __ __ _
__ _ _ _ _and ___ __ __ _ _ _ _ _
◉ Deed of Trust. Answer: The _____ ___ ___ allows for non-judicial
foreclosure in Texas, that is, the lender does not have to go to court
to foreclose on the property.
,◉ note. Answer: The ____ is the contractual agreement to repay the
debt. In other words, it is the promise to repay the loan. The debt is
evidenced by the promissory note. The mortgager(borrower) must
sign the note.
◉ default, security. Answer: the note must include: borrower, lender,
promise to pay, original principal balance, interest, term, periodic
payment (including late charge), ______, _____
◉ acceleration clause. Answer: _______ _______: is the common
provision of a mortgage providing the holder with the right to
demand that the entire outstanding balance is immediately due and
payable in the event of a default.
◉ Amortization. Answer: _______: the systematic and continuous
repayment of an obligation through periodic installments until the
debt has been repaid in full.
◉ fixed interest rate loan. Answer: In a ____ ____ ___ ____, the payment
is the same each month but the allocation to interest is different
each month.
◉ Cap. Answer: ___: A limit placed on payments, interest rates
and/or the balance of a loan.
, ◉ deficiency judgment. Answer: When property is sold in a
foreclosure proceeding and the sale does not bring sufficient funds
to cover the senior mortgages, the original mortgagor(borrower)
may be subject to a _______ _____
◉ approval of the applicant, approval or the property, approval of
the final closing statement known as the HUD-1. Answer:
Underwriters have three main jobs: _____ ___ ___ ____, ____ ___ ___ ___, __
____ _ __ _ _ _ __ _
◉ discount point. Answer: A _______ ___ is an amount equal to 1% of
the principle amount of the note(loan). Loan discount pts are a one-
time charge assessed at the closing by the lender to increase the
yield on the mortgage loan (and buy the interest rate down for the
mortgagor(borrower))
◉ Mortgage bankers. Answer: _______ ______ originate loans where
mortgage brokers bring together the lender and the borrower and
"arrange" the loan.
◉ mortgage banking. Answer: _____ ____:the origination, sales and
servicing of mortgage loans by a firm or individual.
◉ processor. Answer: ______: an individual who gathers the loan
application and all of the required supporting documentation (
QUESTIONS WITH ANSWERS GRADED A+
◉ budget mortgage. Answer: The ______ _____ requires equal
payments to be made by the borrower to cover principle and
interest for the life of the loan.
◉ Construction mortgage. Answer: ___ _____ sometimes called an
'interim loan' or interim financing'
◉ Reverse annuity mortgage. Answer: ___ ____ ____:a loan that allows
a homeowner over the age of 62 to borrow against the equity in his
home and not repay the loan until he no longer occupies the
property
◉ Term or straight loan. Answer: ____ ___ ____ ____: a loan where the
borrower pays interest only for a limited amount of time and at the
end of the term, the principle is due.
◉ Package mortgage. Answer: ____ ____: permits a home buyer to
borrow money from a single lender, not only on the value of the land
and improvements, but also on the value of equipment, such as
appliances
,◉ purchase money mortgage. Answer: ______ ______ ______ can be
structured many ways. :fixed rate; adjustable rate; balloon
◉ Balloon mortgage. Answer: with a ______ __, the amortized payment
of a mortgage remains constant over the period of the loan but
leaves an outstanding balance to be paid at the end of the term.
◉ Wraparound mortgage. Answer: ______ ____ new financing is
wrapped around the existing mortgage. It is illegal for real estate
agents to write contracts with this financing.
◉ lien theory. Answer: Texas is a ____ _____ state.
◉ mortgager(borrower), mortgagee(lender) and Trustee. Answer:
In a Deed of trust there are 3 parties involved: ________ _____ _____
◉ to release the lien when the debt is paid, and foreclose in the
event of default. Answer: Duties of the trustee are __ ____ ___ __ __ __ _
__ _ _ _ _and ___ __ __ _ _ _ _ _
◉ Deed of Trust. Answer: The _____ ___ ___ allows for non-judicial
foreclosure in Texas, that is, the lender does not have to go to court
to foreclose on the property.
,◉ note. Answer: The ____ is the contractual agreement to repay the
debt. In other words, it is the promise to repay the loan. The debt is
evidenced by the promissory note. The mortgager(borrower) must
sign the note.
◉ default, security. Answer: the note must include: borrower, lender,
promise to pay, original principal balance, interest, term, periodic
payment (including late charge), ______, _____
◉ acceleration clause. Answer: _______ _______: is the common
provision of a mortgage providing the holder with the right to
demand that the entire outstanding balance is immediately due and
payable in the event of a default.
◉ Amortization. Answer: _______: the systematic and continuous
repayment of an obligation through periodic installments until the
debt has been repaid in full.
◉ fixed interest rate loan. Answer: In a ____ ____ ___ ____, the payment
is the same each month but the allocation to interest is different
each month.
◉ Cap. Answer: ___: A limit placed on payments, interest rates
and/or the balance of a loan.
, ◉ deficiency judgment. Answer: When property is sold in a
foreclosure proceeding and the sale does not bring sufficient funds
to cover the senior mortgages, the original mortgagor(borrower)
may be subject to a _______ _____
◉ approval of the applicant, approval or the property, approval of
the final closing statement known as the HUD-1. Answer:
Underwriters have three main jobs: _____ ___ ___ ____, ____ ___ ___ ___, __
____ _ __ _ _ _ __ _
◉ discount point. Answer: A _______ ___ is an amount equal to 1% of
the principle amount of the note(loan). Loan discount pts are a one-
time charge assessed at the closing by the lender to increase the
yield on the mortgage loan (and buy the interest rate down for the
mortgagor(borrower))
◉ Mortgage bankers. Answer: _______ ______ originate loans where
mortgage brokers bring together the lender and the borrower and
"arrange" the loan.
◉ mortgage banking. Answer: _____ ____:the origination, sales and
servicing of mortgage loans by a firm or individual.
◉ processor. Answer: ______: an individual who gathers the loan
application and all of the required supporting documentation (
