Real Estate 101- Finance Final Practice Exam Questions And Answers Verified 100% Correct

Real Estate 101- Finance Final Practice Exam Questions And Answers Verified 100% Correct Which Texas agency licenses, regulates, and examines the trust- and insurance-funded prepaid funeral contract sellers? a) Office of Consumer Credit Commissioner (OCCC) b) Texas Department of Banking c) Department of Savings and Mortgage Lending d) Texas Department of Insurance - ANSWER Texas Department of Banking The type of estate that has a definite beginning and ending date is known as what? a) Estate at will b) Estate from year to year c) Life estate d) Estate for years - ANSWER Estate for years Which of these statements is TRUE about financing large apartment complexes? a) Loan terms are not longer than 20 years. b) When determining a loan amount, lenders ignore debt service as a criterion. c) As the size of the building increases, the loan ratio is generally reduced. d) Loan fees for large buildings are usually lower than for single-family residences. - ANSWER As the size of the building increases, the loan ratio is generally reduced. What is the term used to describe a loan that is not government-backed? a) Standard b) Conventional c) Normal d) Junior - ANSWER Conventional With which kind of lease does the tenant not know the actual change in the rent amount in advance? a) Flat b) Step-up c) Percentage d) Indexed - ANSWER Indexed What are the steps in the sales comparison approach to estimating value? a) Select nearby comparables, adjust the subject property for the differences and estimate the value. b) Obtain price data, apply the collected data to the subject and estimate the value. c) Choose appropriate comparable properties, adjust the comparables for the differences and estimate the value. d) Identify sale prices, apply an appreciate rate and estimate the value. - ANSWER Choose appropriate comparable properties, adjust the comparables for the differences and estimate the value. The entity holding title to a property during the term of a deed of trust is called what? a) Trustee b) Trustor c) Beneficiary d) Title company - ANSWER Trustee Who is the person who grants approval for the loan, rejects the loan, or in some cases, agrees to approve the loan if certain conditions are met? a) Lender b) Seller c) Processor d) Underwriter - ANSWER Underwriter The successful bidder at a judicial foreclosure sale receives which of these documents? a) Deed in Lieu of Foreclosure b) Certificate of Sale c) Trustee's Deed d) Warranty Deed - ANSWER Certificate of Sale Which of the following statements is FALSE? a) Noninstitutional lenders have few regulations. b) Institutional lenders are financial intermediaries. c) Noninstitutional lenders are not subject to usury law. d) Institutional lenders can make FHA and VA loans. - ANSWER Noninstitutional lenders are not subject to usury law. Under which type of loan does the portion of payment that is applied to principal increase regularly over time? a) Graduated payment b) Reverse annuity c) Growing Equity d) Renegotiable rate - ANSWER Growing Equity Jim Smith wants to purchase a vacation home and have it double as an investment. What is the maximum amount of time per year that Jim and his family can stay in the home and still be able to take the depreciation? a) 14 days b) 30 days c) 45 days d) 60 days - ANSWER 14 days Which of the following would not be an example of recasting a loan? a) Reducing the interest rate b) Extending the term c) Giving a voluntary conveyance d) Increasing the debt - ANSWER Giving a voluntary conveyance What percent of the REIT's assets must be made up of cash, real estate, mortgage notes, or government securities? a) 30 b) 50 c) 75 d) 95 - ANSWER 75 Which of the following is typically not a short-term mortgage loan? a) Single-family home loan b) Construction loan c) Home improvement loan d) Manufactured home loan - ANSWER Single-family home loan After analyzing the neighborhood, an appraiser will study all of the physical aspects of the specific property being appraised except for which of the following? a) Highway accessibility b) Arrangement and design c) Visual appeal d) Physical durability - ANSWER Highway accessibility The Tax Reform Act of 1986 established an entity that can issue multiclass insecurities. What is this entity called? a) REIT b) REMIC c) RESPA d) REMT - ANSWER REMIC What does the term "mixed-use development" mean? a) A subdivision with common areas for all residents b) More than one use for a single building c) An apartment complex attached to a city park d) An industrial park in a farming community - ANSWER More than one use for a single building Bill bought a property for $270,000. The value of the building on the property is $220,000. If the building has an economic life of 50 years, what is the depreciated value of the building after 5 years? a) $22,000.00