Test Bank Champions Real Estate Finance
Exam Question and Answer | 100% Verified A+ |
Past Questions
• Underwriting -✓✓process of evaluating a borrower's loan application to determine the
risk involved for lender
• Funding -✓✓process of transferring funds to title or escrow company for disbursement
• Servicing -✓✓Sending monthly payment statements and collecting
monthly payments, maintaining payment
records and following up on delinquencies
• Origination -✓✓The process of creating a new mortgage loan
• Pre-qualification/Pre-approval -✓✓Under ideal circumstances the buyer has been
_________________ for a loan prior to
beginning the search for a home.
• Economic cycle -✓✓effects larger economies; up's and downs
• Correspondent Lender -✓✓Usually smaller scale than mortgage bankers or brokers;
typically extend loans with their own funds, at their own risk.
• Who prepares pre-approval letters? -✓✓Department of Savings and Mortgage Lending
(SML).
• Mortgage broker -✓✓Typically functions as a middleman between the borrower and
the lender,
negotiating, selling or arranging loans to be delivered to larger investors.
• Settlement -✓✓aka closing in some markets
• Closing -✓✓consummation of a contractual real estate transaction in which all
appropriate documents are signed & proceeds of mortgage loan are disbursed by
lender
• Recession -✓✓significant decline in economic activity
• Mortgage banker -✓✓Entities that provide their own funds for purpose of providing
mortgage
financing, as opposed to commercial banks/savings associations.
, • While the agent does not have to be knowledgeable in all aspects of mortgage
lending, he or she has
a role which includes: -✓✓1. Arranging pre-qualification/pre-approval of buyers
2. Discussing general mortgage loan programs that buyers might consider
3. Answering finance and closing-related questions
4. Providing buyers with a list of potential lenders
5. Preparing the contract with all terms of sale, including financing conditions
6. Tracking important dates from contract to closing, including monitoring the time the
buyer has to obtain financing approval
• "Four Cs" of good lending -✓✓Character, Capacity, Capital and Collateral
• Character -✓✓measure of the willingness of a borrower to make on-time
payments.Credit character
is revealed in the borrower's credit report.
• Capacity -✓✓measure of borrower's ability to repay the debt, and is demonstrated
through current earnings and job stability.
• Capital -✓✓sum of all assets that the borrower has accumulatedSavings accounts,
investments
and other assets
• Collateral -✓✓something of value that can be pledged as security for repayment of the
loan
• Single most important determinant of value in residential real estate -✓✓size of the
employment market
• The lower the rate offered the borrower -✓✓the higher the charge for discount points
• The standard pre-qualification is prepared
using -✓✓Form A Conditional Pre-qualification Letter,
• If the buyer is pre-approved, he or she will obtain -✓✓Form B Conditional Approval
Letter.
• Congress created the Federal Housing act in? -✓✓1934
• In order to qualify for exemption from capital gains, the property must have been the
primary residence for two of the previous _____ years -✓✓five
Exam Question and Answer | 100% Verified A+ |
Past Questions
• Underwriting -✓✓process of evaluating a borrower's loan application to determine the
risk involved for lender
• Funding -✓✓process of transferring funds to title or escrow company for disbursement
• Servicing -✓✓Sending monthly payment statements and collecting
monthly payments, maintaining payment
records and following up on delinquencies
• Origination -✓✓The process of creating a new mortgage loan
• Pre-qualification/Pre-approval -✓✓Under ideal circumstances the buyer has been
_________________ for a loan prior to
beginning the search for a home.
• Economic cycle -✓✓effects larger economies; up's and downs
• Correspondent Lender -✓✓Usually smaller scale than mortgage bankers or brokers;
typically extend loans with their own funds, at their own risk.
• Who prepares pre-approval letters? -✓✓Department of Savings and Mortgage Lending
(SML).
• Mortgage broker -✓✓Typically functions as a middleman between the borrower and
the lender,
negotiating, selling or arranging loans to be delivered to larger investors.
• Settlement -✓✓aka closing in some markets
• Closing -✓✓consummation of a contractual real estate transaction in which all
appropriate documents are signed & proceeds of mortgage loan are disbursed by
lender
• Recession -✓✓significant decline in economic activity
• Mortgage banker -✓✓Entities that provide their own funds for purpose of providing
mortgage
financing, as opposed to commercial banks/savings associations.
, • While the agent does not have to be knowledgeable in all aspects of mortgage
lending, he or she has
a role which includes: -✓✓1. Arranging pre-qualification/pre-approval of buyers
2. Discussing general mortgage loan programs that buyers might consider
3. Answering finance and closing-related questions
4. Providing buyers with a list of potential lenders
5. Preparing the contract with all terms of sale, including financing conditions
6. Tracking important dates from contract to closing, including monitoring the time the
buyer has to obtain financing approval
• "Four Cs" of good lending -✓✓Character, Capacity, Capital and Collateral
• Character -✓✓measure of the willingness of a borrower to make on-time
payments.Credit character
is revealed in the borrower's credit report.
• Capacity -✓✓measure of borrower's ability to repay the debt, and is demonstrated
through current earnings and job stability.
• Capital -✓✓sum of all assets that the borrower has accumulatedSavings accounts,
investments
and other assets
• Collateral -✓✓something of value that can be pledged as security for repayment of the
loan
• Single most important determinant of value in residential real estate -✓✓size of the
employment market
• The lower the rate offered the borrower -✓✓the higher the charge for discount points
• The standard pre-qualification is prepared
using -✓✓Form A Conditional Pre-qualification Letter,
• If the buyer is pre-approved, he or she will obtain -✓✓Form B Conditional Approval
Letter.
• Congress created the Federal Housing act in? -✓✓1934
• In order to qualify for exemption from capital gains, the property must have been the
primary residence for two of the previous _____ years -✓✓five
