Champions Real Estate Finance Exams (Latest 2024/
2025 Updates STUDY BUNDLE PACKAGE) Questions and
Verified Answers| 100% Correct| A Grade
Loan-to-Value Ratio (LTV) - ANSWERThe percentage of the lesser of the appraised
value or sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to
80% of the sales price or appraised value, whichever is lower.
Package Mortgage - ANSWERIncludes both real and personal property ( fixtures and
furnishings)
Blanket Mortgage - ANSWERCovers more than one piece of property.
Wraparound Mortgage - ANSWERMethod of financing which preserves the low,
existing interest rate on the original note.
Open-End Mortgage - ANSWERPermits additional borrowing on the same note. This
is sometimes called a credit card mortgage or a home equity line of credit - HELOC.
Budget Mortgage - ANSWERThe monthly house payment includes principal, interest,
taxes and insurance (known as PITI)
Collateral -Dependent Loans - ANSWERA hard money loan is a specific type of asset-
based financing in which a borrower receives funds secured by the value of a parcel
of real estate.
Character - ANSWERIs a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
Capacity - ANSWERIs a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
Capital - ANSWERIs the sum of all assets that the borrower has accumulated.
Collateral - ANSWERIs something of value that can be pledged as security for
repayment.
Yield - ANSWERIs the return that the investor recieves over the life of the loan. (Also
known as profit)
Originator - ANSWERThe process of creating a new mortgage loan, including all steps
taken by a lender to attract and qualify a borrower.
, Mortgage Broker - ANSWERTypically functions as a middleman between the
borrower and the lender, negotiating, selling or arranging loans to be delivered to
larger investors. At one time originated up to 80% of all mortgage loans. (Back on the
rise)
Mortgage Banker - ANSWEREntities which provide their own funds for the purpose
of providing mortgage financing, as opposed to commercial banks/savings
associations. (Held, or "Warehoused")
Correspondent Lender - ANSWERUsually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own funds, at their own risk.
Processing - ANSWEROnce application is complete the file moves into this phase.
Underwriting - ANSWERThe detailed process of evaluating a borrower's loan
application to determine the risk involved for the lender.
Closing - ANSWERThe consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan are then
disbursed by the lender.
Servicing - ANSWERIncludes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and managing
escrow and impound funds) remitting funds to the note holder, and following up on
delinquencies.
Supply and Demand - ANSWERan economic concept that states that the price of a
good rises and falls depending on how many people want it and depending on how
much of the good is available.
Funding - ANSWERThe process of transferring funds to a title or escrow company for
disbursement
The Safe Act - ANSWERDesigned to enhance consumer protection and reduce fraud.
(Key component of HERA)
M1 - ANSWERIs defined as the sum of currency held by the public and transaction
deposits at depository institutions.
M2 - ANSWERIs defined as M1 plus saving deposits, small-denomination time
deposits (those issued in amounts of less than $100,000) and retail money market
mutual funds shares.
Fiat Money - ANSWERIs currency that is not backed by any precious metals at all.
2025 Updates STUDY BUNDLE PACKAGE) Questions and
Verified Answers| 100% Correct| A Grade
Loan-to-Value Ratio (LTV) - ANSWERThe percentage of the lesser of the appraised
value or sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the lender will loan up to
80% of the sales price or appraised value, whichever is lower.
Package Mortgage - ANSWERIncludes both real and personal property ( fixtures and
furnishings)
Blanket Mortgage - ANSWERCovers more than one piece of property.
Wraparound Mortgage - ANSWERMethod of financing which preserves the low,
existing interest rate on the original note.
Open-End Mortgage - ANSWERPermits additional borrowing on the same note. This
is sometimes called a credit card mortgage or a home equity line of credit - HELOC.
Budget Mortgage - ANSWERThe monthly house payment includes principal, interest,
taxes and insurance (known as PITI)
Collateral -Dependent Loans - ANSWERA hard money loan is a specific type of asset-
based financing in which a borrower receives funds secured by the value of a parcel
of real estate.
Character - ANSWERIs a measure of the willingness of a borrower to make on-time
payments. Credit character is revealed in the borrower's credit report.
Capacity - ANSWERIs a measure of the borrower's ability to repay the debt, and is
demonstrated through current earnings and job stability.
Capital - ANSWERIs the sum of all assets that the borrower has accumulated.
Collateral - ANSWERIs something of value that can be pledged as security for
repayment.
Yield - ANSWERIs the return that the investor recieves over the life of the loan. (Also
known as profit)
Originator - ANSWERThe process of creating a new mortgage loan, including all steps
taken by a lender to attract and qualify a borrower.
, Mortgage Broker - ANSWERTypically functions as a middleman between the
borrower and the lender, negotiating, selling or arranging loans to be delivered to
larger investors. At one time originated up to 80% of all mortgage loans. (Back on the
rise)
Mortgage Banker - ANSWEREntities which provide their own funds for the purpose
of providing mortgage financing, as opposed to commercial banks/savings
associations. (Held, or "Warehoused")
Correspondent Lender - ANSWERUsually smaller in scale than mortgage bankers or
brokers, these lenders typically extend loans with their own funds, at their own risk.
Processing - ANSWEROnce application is complete the file moves into this phase.
Underwriting - ANSWERThe detailed process of evaluating a borrower's loan
application to determine the risk involved for the lender.
Closing - ANSWERThe consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan are then
disbursed by the lender.
Servicing - ANSWERIncludes collecting monthly payments, maintaining records of
payments and balances, collecting and paying taxes and insurance ( and managing
escrow and impound funds) remitting funds to the note holder, and following up on
delinquencies.
Supply and Demand - ANSWERan economic concept that states that the price of a
good rises and falls depending on how many people want it and depending on how
much of the good is available.
Funding - ANSWERThe process of transferring funds to a title or escrow company for
disbursement
The Safe Act - ANSWERDesigned to enhance consumer protection and reduce fraud.
(Key component of HERA)
M1 - ANSWERIs defined as the sum of currency held by the public and transaction
deposits at depository institutions.
M2 - ANSWERIs defined as M1 plus saving deposits, small-denomination time
deposits (those issued in amounts of less than $100,000) and retail money market
mutual funds shares.
Fiat Money - ANSWERIs currency that is not backed by any precious metals at all.
