REAL ESTATE U FULL SOLUTION PAPER
2026 QUESTIONS WITH ANSWERS
GRADED A+
◉Sublease. Answer: In a sublease, the original tenant is still
responsible to the landlord for the lease payments under the lease
contract.
In a sublease arrangement, the sub-lessee pays the rent to the tenant
(lessee) and the tenant pays the landlord.
◉Escalation clause. Answer: - A clause that allows landlords to raise
rents during the term of the lease.
- Lease escalation clauses call for the increased costs to the tenant
for different reasons at specified times during the lease term. These
clauses protect the property owner against increases during the
lease term.
◉Ground lease. Answer: - An agreement in which a tenant is
permitted to develop a piece of property during the lease period,
after which the land and all improvements are turned over to the
property owner.
- This long-term lease (also referred to as a land lease) is commonly
used for commercial property.
,◉Bridge loan (Swing loan). Answer: - A type of short-term loan,
typically taken out for a period of 2 weeks to 3 years.
- A bridge loan is a type of gap mortgage in which funds are provided
over and above an already existing loan until more permanent
financing is in place.
- A bridge loan allow a buyer to obtain a new property without
having to sell his/her current property.
◉Mortgagor. Answer: Is the borrower (typically the person buying
the house)
◉Mortgagee. Answer: Is the lender or bank who provides a loan to
the borrower or homeowner
◉Real Estate Settlement Procedures Act (RESPA). Answer: - A
consumer protection statute, first passed in 1974. The purpose of
RESPA are
1) To help consumers become better shoppers for settlement
services and
2) To eliminate kickbacks and referral fees that unnecessarily
increase the costs of certain settlement services.
RESPA requires:
1) A Good Faith Estimate (GFE)
, 2) HUD Booklet
3) HUD Form No.1
◉Wraparound mortgage. Answer: A form of secondary financing for
the purchase of real property. The seller extends to the buyer a
junior mortgage which wraps around the existing in addition to any
superior mortgages already secured by the property.
◉Secondary mortgage markets. Answer: - The primary mortgage
market is the lending institution where the mortgage originates
Example: Bank of America gives a loan to the homeowner.
- The secondary mortgage market is where the loans originated in
the primary mortgage market are bought and sold.
◉Truth in Lending Act (TILA) / Regulation Z. Answer: - The Truth in
Lending Act of 1968 is United States federal law designated to
promote the informed use of consumer credit, by requiring
disclosures about its terms and cost to standardize the manner in
which costs associated with borrowing are calculated and disclosed.
- TILA requires four main disclosures:
1) Annual percentage rate
2) Finance charge
3) Amount financed
2026 QUESTIONS WITH ANSWERS
GRADED A+
◉Sublease. Answer: In a sublease, the original tenant is still
responsible to the landlord for the lease payments under the lease
contract.
In a sublease arrangement, the sub-lessee pays the rent to the tenant
(lessee) and the tenant pays the landlord.
◉Escalation clause. Answer: - A clause that allows landlords to raise
rents during the term of the lease.
- Lease escalation clauses call for the increased costs to the tenant
for different reasons at specified times during the lease term. These
clauses protect the property owner against increases during the
lease term.
◉Ground lease. Answer: - An agreement in which a tenant is
permitted to develop a piece of property during the lease period,
after which the land and all improvements are turned over to the
property owner.
- This long-term lease (also referred to as a land lease) is commonly
used for commercial property.
,◉Bridge loan (Swing loan). Answer: - A type of short-term loan,
typically taken out for a period of 2 weeks to 3 years.
- A bridge loan is a type of gap mortgage in which funds are provided
over and above an already existing loan until more permanent
financing is in place.
- A bridge loan allow a buyer to obtain a new property without
having to sell his/her current property.
◉Mortgagor. Answer: Is the borrower (typically the person buying
the house)
◉Mortgagee. Answer: Is the lender or bank who provides a loan to
the borrower or homeowner
◉Real Estate Settlement Procedures Act (RESPA). Answer: - A
consumer protection statute, first passed in 1974. The purpose of
RESPA are
1) To help consumers become better shoppers for settlement
services and
2) To eliminate kickbacks and referral fees that unnecessarily
increase the costs of certain settlement services.
RESPA requires:
1) A Good Faith Estimate (GFE)
, 2) HUD Booklet
3) HUD Form No.1
◉Wraparound mortgage. Answer: A form of secondary financing for
the purchase of real property. The seller extends to the buyer a
junior mortgage which wraps around the existing in addition to any
superior mortgages already secured by the property.
◉Secondary mortgage markets. Answer: - The primary mortgage
market is the lending institution where the mortgage originates
Example: Bank of America gives a loan to the homeowner.
- The secondary mortgage market is where the loans originated in
the primary mortgage market are bought and sold.
◉Truth in Lending Act (TILA) / Regulation Z. Answer: - The Truth in
Lending Act of 1968 is United States federal law designated to
promote the informed use of consumer credit, by requiring
disclosures about its terms and cost to standardize the manner in
which costs associated with borrowing are calculated and disclosed.
- TILA requires four main disclosures:
1) Annual percentage rate
2) Finance charge
3) Amount financed
