30 HOUR PA FUNDAMENTALS TEST BANK EXAM ACCURATE EXAM QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS)/ALREADY GRADED A+

30 HOUR PA FUNDAMENTALS TEST BANK EXAM ACCURATE
EXAM QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS)/ALREADY GRADED A+

Question 1
What is the outstanding amount of money owed on a loan, not including
interest, called?
A) The interest
B) The principal
C) The payment
D) The collateral
E) The equity
Correct Answer: B) the principal
Rationale: The loan balance is called the principal, which is the
original sum of money borrowed, or the portion of it that remains
unpaid, excluding interest.

Question 2
Charging interest in excess of a legally defined maximum rate is called
__________ or illegal interest.
A) Discounting
B) Usury
C) Amortization
D) Default
E) Origination
Correct Answer: B) usury
Rationale: Charging interest in excess of this rate is called usury or
illegal interest, which is prohibited by law.

Question 3
What is the total dollar amount of interest and points paid by a borrower at
closing?
A) Closing costs
B) Escrow fees
C) Origination fees

,D) Prepaid interest
E) Underwriting fees
Correct Answer: D) prepaid interest
Rationale: Prepaid interest is the total dollar amount of interest and
points paid by a borrower at closing.

Question 4
What are a one-time fee paid at closing to increase the yield to the investor?
A) Interest
B) Down payment
C) Points
D) Principal
E) Fees
Correct Answer: C) points
Rationale: Points are a one-time fee paid at closing to increase the
yield to the investor.

Question 5
Points give the lender more money up-front so he will be encouraged to
make a loan at a __________ interest rate.
A) Higher
B) Fixed
C) Adjustable
D) Lower
E) Variable
Correct Answer: D) lower
Rationale: Points give the lender more money up-front so he will be
encouraged to make a loan at a lower interest rate, as the yield is
increased upfront.

Question 6
The lender is able to make lower interest rate loans, but the buyer must
come up with the point money in ___________ at the time of closing.

,A) Checks
B) Promissory notes
C) Cash
D) Securities
E) Credit
Correct Answer: C) cash
Rationale: The lender is able to make lower interest rate loans, but
the buyer must come up with the point money in cash at the time of
closing.

Question 7
What is the principle of using other people's money to make investments?
A) Equity financing
B) Debt financing
C) Leverage
D) Capitalization
E) Diversification
Correct Answer: C) leverage
Rationale: Leverage is the principle of using other people's money
(borrowed funds) to make investments, aiming to magnify returns.

Question 8
The ratio of loan amount compared to the value of the property is called the
__________.
A) Debt-to-income ratio
B) Loan-to-Value Ratio
C) Equity ratio
D) Capitalization rate
E) Debt service coverage ratio
Correct Answer: B) Loan to Value Ratio
Rationale: The ratio of loan amount compared to the value of the
property is called the Loan to Value Ratio (LTV).

, Question 9
The value in a property held by the owner in excess of any liens against it is
called __________.
A) Principal
B) Collateral
C) Equity
D) Appraisal value
E) Market value
Correct Answer: C) equity
Rationale: Equity is the value in a property held by the owner in
excess of any liens against it.

Question 10
What is the cost per thousand that is required to create the principal and
interest payment necessary to pay off the loan?
A) An interest rate.
B) A loan term.
C) A factor.
D) A yield.
E) An amortization schedule.
Correct Answer: C) a factor
Rationale: A factor is the cost per thousand that is required to create
the principal and interest payment necessary to pay off the loan,
often used in mortgage calculations.

Question 11
The longer the loan, the lower the __________.
A) Principal payment.
B) Total payment.
C) Interest rate.
D) Monthly payment (all else equal).
E) Equity build-up.