SC PSI Real Estate Exam Prep Questions With Verified Answers

Which of the following describes the term appreciation? - Answer An increase in the value of property When ownership of a mortgage is transferred from one company or individual to another, it is called: - Answer An assignment A mortgage loan which requires the remaining balance be paid at a specific point in time is called a: - Answer Balloon mortgage The following reason accounts for why bridge loans are not used much anymore: - Answer More second mortgage lenders now will lend at a high to loan value. Sellers would rather accept offers from buyers who have already sold their property. A title which is free of liens or legal questions as to ownership of the property is called a_______________title. - Answer Clear title What is the collateral in a home loan? - Answer The property itself The adjustment date on adjustable rate mortgage is: - Answer The date the interest rate changes What is the deposit made by potential buyer to show he is serious about buying a house called? - Answer Earnest money deposit A right-of-way which gives persons other than the owner access to our over a property is known as an: - Answer Easement Which best describes a subdivision? - Answer A housing development created by dividing a tract of land into individual lots When someone contributes to the construction or rehabilitation of a property with labor or services rather than cash, that contribution is called: - Answer Sweat equity A two-step mortgage is defined as: - Answer An adjustable rate mortgage with one interest rate for the first five or seven years and a different rate for the remainder of the term A legal document evidencing a person's right to or ownership of a property is called a: - Answer Title If you were buying a house that include furnishing, you would receive a written document transferring title to the personal property. This document is called a: - Answer Bill of sale An oral or written agreement that is binding in a court of law is called a: - Answer Contract The part of the purchase price of a property that the buyer pays in cash and does not finance with the mortgage is called the: - Answer Down payment A female named in a will to administer an estate is called an: - Answer Executrix The greatest possible interest a person can have in real estate is called: - Answer Fee simple Required for properties located in federally designated flood areas, this type of insurance compensates for physical property damage resulting from flooding. It is called - Answer Flood insurance The following is true of a government loan: - Answer Guaranteed by the Department of veteran affairs. (VA) Guaranteed by the rural housing service. (RHS) It is insured by the Federal housing administration. (FHA) The person conveying an interest in real property is called: - Answer The grantor Insurance that covers in the event of physical damage to property from fire, wind, vandalism, or other hazards is called: - Answer Hazard insurance A liquid asset is: - Answer A cash asset or an asset easily turned into cash Another term for the lender in a mortgage agreement is the: - Answer Mortgagee If you are buying a house and asking the seller to provide all or part of the financing, you're asking for_____________ financing. - Answer Owner A point is: - Answer 1% of the amount of the mortgage What does a power of attorney grant someone? - Answer Complete or limited authority on behalf of someone else The principal is: - Answer The amount borrowed or remaining unpaid. Part of monthly payment that reduces the remaining balance of a mortgage. A promissory note is: - Answer A written promise to repay a specified amount over specified period of time Which of the following best describes a real estate agent? - Answer A licensed person who negotiates and transact the sale of real estate When an assumption takes place? - Answer When the buyer assumes the sellers mortgage A legal document conveying title to a property is called a: - Answer Deed If you have a loan and transfer the title to another individual without informing the lender, it is likely that the lender will demand payment of the outstanding loan balance. He is able to do this because of a clause in your mortgage called the: - Answer Acceleration clause. The most common type of bankruptcy is called: - Answer Chapter 7 no asset bankruptcy Which of the following best describes a broker? - Answer Someone who owns a real estate firm. Some real estate agents working for brokers. Someone who acts as an agent and brings two parties together for a transaction and earns a fee for this. A normal contingency in a real estate contract would be that the: - Answer Purchaser is able to obtain a satisfactory home inspection from a qualified inspector If you go to a bank or mortgage company to apply for a home, what type of mortgage would you be applying for? - Answer Conventional loan A report of someone's credit history which is prepared by credit bureau and use by a lender in the loan qualification process is called a: - Answer Credit report If you have not made your mortgage payment within 30 days of the due date, the mortgage is considered to be in: - Answer Default A term used by appraisers to estimate the physical condition of a building. It may be different from the buildings actual age: - Answer Effective age The difference between the fair market value of a property and the amount still owed on the mortgage and other liens in the owner's financial interest in the property and is called his: - Answer Equity You put in a new driveway to your property, but in the process the paving goes across your property line onto your neighbors property a few inches. This is called a: - Answer Encroachment A government loan that is not a VA loan would be a: - Answer FHA mortgage If you convey an interest in real property to a relative, that person is known as the: - Answer Grantee You decide you want to buy a boat and you want to borrow against the equity in your home. You would get a mortgage loan up to a specified amount which is in second position to your first mortgage. This arrangement is called a: - Answer Home equity line of credit You and your sister are joint tenants in the home your mother left you. Your sister has three children in her will and you have one. If she dies first, who does the property go to? - Answer It goes entirely to you What is the best description of a lien? - Answer A legal claim against property that must be paid off when it's sold What is a lock-in? - Answer An agreement from a lender guaranteeing a specific interest rate for specific time at a certain cost The right of a government to take private property for public use upon payment of its fair market value. It is the basis for condemnation proceedings. - Answer Eminent domain A mortgage with a lien position subordinate to the first mortgage on a piece of property is called a: - Answer Second mortgage An adjustable rate mortgage also known as an ARM is: - Answer One in which the interest rate changes periodically, depending on index changes A schedule that shows how much of each payment will be applied to principle and how much toward interest over the life of a loan is called a: - Answer Amortization schedule The term applied to a mortgage in which you make the payments every two weeks, thereby making 13 payments a year rather than 12. This mortgage is paid off faster than a normal mortgage. - Answer Bi-weekly mortgage The limitation of how much an adjustable rate mortgage may adjust over six months period annually period, and over the life of the loan is called a: - Answer Cap When is a real estate transaction considered to be closed? - Answer When the closing documents have been recorded at the local recorders office. When all the documents are signed and money changes hands. A record of individuals repayment of debt, reviewed by mortgage lenders in determining credit risk is called a: - Answer Credit history If you sell your property to a neighbor and the lender demands repayment in full, this means you have a______________________ in your mortgage. - Answer Due-on-sale provision The sum total of all the real and personal property owned by an individual at time of death is called their: - Answer Estate If you list your property with the real estate agent and sign a written agreement that they are the only ones entitled to a listing for a specific time you have given them an: - Answer Exclusive listing Fair market value could be defined as: - Answer *The most a buyer, willing, but not compelled to buy, would pay. * The least a seller, willing, but not compelled to sell, would take. Many states determine the order of water rights according to which users of the water hold a recorded beneficial use permit. This allocation of water rights is determined by: - Answer The doctrine of prior appropriation The right to control one's property includes all of the following except: - Answer The right to exclude the utilities meter reader. Which of the following types of ownership cannot be created by operation of law, but must be created by the parties expressed intent: - Answer Tenancy by entireties Which of the following is considered to be personal property? - Answer Patio furniture The word "improvement" would refer to all the following except: - Answer Trade fixtures All of the following are physical characteristics of land except: - Answer Scarcity Certain items on the premises that are installed by the tenant and are related to the tenants business are called: - Answer Trade fixtures Personal property includes all the following except: - Answer Fixtures A person who has complete control over a parcel or a real estate is said to own a: - Answer Fee simple estate A portion of Wendell's building was inadvertently built on Ginny's land. This is called an: - Answer Encroachment Purchase of a ticket for a professional sporting event gives the bearer what? - Answer A license to enter and claim a seat for the duration of the game. If the owner of the dominant tenement becomes the owner of the servient tenement and merges the two properties, what happens? - Answer The easement is terminated Homeowner Ginny acquired the ownership of land that was deposited by a river running through her property by: - Answer Accretion The rights of the owner of property located along the banks of a river or called: - Answer Riparian rights The local utility company dug up Frank's garden to install a natural gas line. The company claimed it and had a valid easement and proved it through the county records. Frank claimed the easement was not valid because he did not know about it. The easement: - Answer Was valid even though the owner did not know about it Jim and Sandy are next-door neighbors. Sandy tells Jim that he can store his camper in her yard for a few weeks until she needs the space. Sandy did not charge Jim rent for the use of her yard. Sandy has given Jim a what? - Answer License Your neighbors use your driveway to reach their garage on their property. Your attorney explains that the ownership of the neighbors real estate includes an easement appurtenant giving them the driveway right. Your property is the: - Answer Servient tenement Quentin owned 2 acres of land. He sold one acre to Frank and reserved for himself an appurtenant easement over Frank's land for ingress and egress. Frank's land: - Answer Is the servient tenement Jenni owns 50 acres of land with 500 feet of frontage on a desirable recreational lake. She wishes to subdivide the parcel into salable lots, but she wants to retain control over the lake frontage while allowing lot owners to have access to the lake. Which of the following types of access rights would provide the greatest protection for a prospective purchaser? - Answer An appurtenant easement Sam and Nancy bought a store building and took title as joint tenants. Nancy died testate. Sam now owns the store: - Answer In severalty When real estate under an estate for years is sold, what happens to the lease? - Answer It binds the new owner Evan lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan covering the entire property. Like the other residents, Evan owns stock in a corporation and has a lease on his apartment. This type of ownership is called a: - Answer Cooperative Tom leases store space to Kim for a restaurant, and Kim installs her ovens, booths, counters, and other equipment. When do these items become real property? - Answer When the lease expires, if the items are not taken by the tenant Jim, Manny and Harry are joint tenants owning a parcel of land. Hairy conveys his interest to his longtime friend Wendell. After the conveyance, Jim and Manny: - Answer Remain joint tenants owning a two-thirds interest In a gift of a parcel of real estate, one of the two owners was given an undivided 60% interest and the other received an undivided 40% interest. The two owners hold their interest as what? - Answer Tenants in common To create a joint tenancy relationship in the ownership of real estate, there must be unities of: - Answer Possession, interest, time, and title(PITT) What is a Schedule of Exceptions on a title policy? - Answer List of things not insured in the policy. When a company furnishes materials for the construction of a house and is subsequently not paid it may file a: - Answer Mechanics lien