STATE (Nebraska) Real Estate Practice
Exam 1 Questions and Verified Correct
Answers
a balloon payment answer - a final loan payment that is much larger than the regular monthly
payments
In an installment land contract, what type of title did the seller retain? answer - Legal
Second Mortgage answer - holds a higher rate of interest
what happens in a second mortgage... interest rate, risk and exposure answer - high interest,
high risk and added exposure for lender, they are 2nd in line after the 1st mortgage holder. in
case of foreclosure, that means the first mortgage holder is paid in full before any money comes
out.
Urury is what type of interest answer - rates above the interest rate ceiling (illegal interest, loan
sharks)
A borrower bought a $174,000 house with no down payment. The loan was probably answer -
VA Loan (zero-down instruments, while FHA loans permit low down payments in the 5% range.
A house sold for $420,000. The buyer made a 20% down payment. Monthly interest on the loan
was $1,400. What was the interest rate on the loan? answer - With a 20% down payment of
$84,000, the buyer had a mortgage of $336,000. Since interest is expressed in annual terms,
multiply the monthly payment of $1,400 times twelve. That yields an annual interest cost of
$16,800, divided by the principal balance of $336,000, yields an annual rate of 5%.
, what type of loan requires principal and interest payments at regular intervals and debt is
liquidated until its payed off answer - amortized loan
Under RESPA, a copy of Real Estate Settlement Costs must be given when? answer - At the time
of loan application, or within 3 days of application.
Who pays for the broker's commission, buyer or seller? answer - the seller
An impound/ reserve benefits ____ the most answer - the lender
A VA loan may be granted for the purchase of a one-family to four-family property if answer -
the veteran agrees to live there
sale-leaseback transaction answer - the owner of an asset sells it and immediately leases it
back from the new owner
standard yardstick expressing true annual cost of borrowing.. percentage rate answer - Annual
percentage rate, APR
RESPA would prohibit which of the following acts? paying... answer - Paying of kickbacks
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain
the property. What is this right called? answer - Statutory right of redemption
The lender is required, under RESPA, to provide a detailed "Good Faith Estimate (GFE)"
statement at the time of loan application or within three business days to answer - the buyer
Exam 1 Questions and Verified Correct
Answers
a balloon payment answer - a final loan payment that is much larger than the regular monthly
payments
In an installment land contract, what type of title did the seller retain? answer - Legal
Second Mortgage answer - holds a higher rate of interest
what happens in a second mortgage... interest rate, risk and exposure answer - high interest,
high risk and added exposure for lender, they are 2nd in line after the 1st mortgage holder. in
case of foreclosure, that means the first mortgage holder is paid in full before any money comes
out.
Urury is what type of interest answer - rates above the interest rate ceiling (illegal interest, loan
sharks)
A borrower bought a $174,000 house with no down payment. The loan was probably answer -
VA Loan (zero-down instruments, while FHA loans permit low down payments in the 5% range.
A house sold for $420,000. The buyer made a 20% down payment. Monthly interest on the loan
was $1,400. What was the interest rate on the loan? answer - With a 20% down payment of
$84,000, the buyer had a mortgage of $336,000. Since interest is expressed in annual terms,
multiply the monthly payment of $1,400 times twelve. That yields an annual interest cost of
$16,800, divided by the principal balance of $336,000, yields an annual rate of 5%.
, what type of loan requires principal and interest payments at regular intervals and debt is
liquidated until its payed off answer - amortized loan
Under RESPA, a copy of Real Estate Settlement Costs must be given when? answer - At the time
of loan application, or within 3 days of application.
Who pays for the broker's commission, buyer or seller? answer - the seller
An impound/ reserve benefits ____ the most answer - the lender
A VA loan may be granted for the purchase of a one-family to four-family property if answer -
the veteran agrees to live there
sale-leaseback transaction answer - the owner of an asset sells it and immediately leases it
back from the new owner
standard yardstick expressing true annual cost of borrowing.. percentage rate answer - Annual
percentage rate, APR
RESPA would prohibit which of the following acts? paying... answer - Paying of kickbacks
In most states, by paying the debt after a foreclosure sale, the mortgagor has the right to regain
the property. What is this right called? answer - Statutory right of redemption
The lender is required, under RESPA, to provide a detailed "Good Faith Estimate (GFE)"
statement at the time of loan application or within three business days to answer - the buyer
