Page 1 of 33
REE NM EXAM NEWEST VERSION QUESTIONS AND
CORRECT DETAILED SOLUTIONS LATEST UPDATE JUST
RELEASED THIS YEAR
Question: If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for
$38,600, how much money would be paid in discount points if the lender charged four points?
$1,600
$1,544
$1,500
$385 - CORRECT ANSWER✔✔$1,544
One discount point cost the buyer 1% of the loan. $38,600 loan x 0.01 = $386; $386 x 4 =
$1,544.
Question: An apartment building that sold for $780,000 had a monthly gross income of $8,000.
What is its monthly gross rent multiplier?
97.5
62.4
, Page 2 of 33
103
158 - CORRECT ANSWER✔✔97.5
$780,000 ÷ $8,000 = 97.5 GRM
Question: What is 25% converted to a decimal?
25.0
2.50
0.25
0.025 - CORRECT ANSWER✔✔0.25
Q:If one discount point costs the borrower 1% of the loan amount, and increases the lender's
yield by 1/8th of one percent, how many discount points must be purchased to lower the
interest rate by 1%?
1
4
8
16 - CORRECT ANSWER✔✔8
, Page 3 of 33
1/8th = 0.125; 1.0 ÷ 0.125 = 8
Question: A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91',
side D = 18', and side E = 55'. What is the perimeter of the lot?
257 feet
220 feet
320 feet
275 feet - CORRECT ANSWER✔✔275 feet
44' + 67' + 91' + 18' + 55' = 275'
Question: A home seller wants to net $15,000. If he has agreed to pay a 5% commission, the
loan payoff is $94,000 and closing costs are $16,000, what must the minimum listing price be?
Round to the nearest $100.
$125,000
$130,700
$136,300
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$131,600 - CORRECT ANSWER✔✔$131,600
Sales Price = 100%, Commission = 5%. All deductions from the sales price other than the
commission = 95% of the sales price. $94,000 loan payoff + $16,000 closing costs + $15,000 net
proceeds = $125,000 deductions other than commission. $125,000 / .95 = $131,578.94
(($131,600). $131,578.94 x .05 = $6,578.94 sales commission. $125,000 + $6,578.94 =
$131,578.94 ($131,600)
Question: A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised
at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first
month's interest?
$637.50
$7,650
$737.50
$6,750 - CORRECT ANSWER✔✔$637.50
$200,000 list price x 0.90 = $180,000 contract sales price. Since lender always uses the less of
the appraised value or the contract sales price, use $180,00 for the remainder of the
calculations. $180,000 contract sales price x 0.85 LTV = $153,000 loan. $153,000 loan x 0.05
interest rate = $7,650 annual interest. $7,650 ÷ 12 = $637.50 monthly interest payment for the
first month.
REE NM EXAM NEWEST VERSION QUESTIONS AND
CORRECT DETAILED SOLUTIONS LATEST UPDATE JUST
RELEASED THIS YEAR
Question: If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for
$38,600, how much money would be paid in discount points if the lender charged four points?
$1,600
$1,544
$1,500
$385 - CORRECT ANSWER✔✔$1,544
One discount point cost the buyer 1% of the loan. $38,600 loan x 0.01 = $386; $386 x 4 =
$1,544.
Question: An apartment building that sold for $780,000 had a monthly gross income of $8,000.
What is its monthly gross rent multiplier?
97.5
62.4
, Page 2 of 33
103
158 - CORRECT ANSWER✔✔97.5
$780,000 ÷ $8,000 = 97.5 GRM
Question: What is 25% converted to a decimal?
25.0
2.50
0.25
0.025 - CORRECT ANSWER✔✔0.25
Q:If one discount point costs the borrower 1% of the loan amount, and increases the lender's
yield by 1/8th of one percent, how many discount points must be purchased to lower the
interest rate by 1%?
1
4
8
16 - CORRECT ANSWER✔✔8
, Page 3 of 33
1/8th = 0.125; 1.0 ÷ 0.125 = 8
Question: A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91',
side D = 18', and side E = 55'. What is the perimeter of the lot?
257 feet
220 feet
320 feet
275 feet - CORRECT ANSWER✔✔275 feet
44' + 67' + 91' + 18' + 55' = 275'
Question: A home seller wants to net $15,000. If he has agreed to pay a 5% commission, the
loan payoff is $94,000 and closing costs are $16,000, what must the minimum listing price be?
Round to the nearest $100.
$125,000
$130,700
$136,300
, Page 4 of 33
$131,600 - CORRECT ANSWER✔✔$131,600
Sales Price = 100%, Commission = 5%. All deductions from the sales price other than the
commission = 95% of the sales price. $94,000 loan payoff + $16,000 closing costs + $15,000 net
proceeds = $125,000 deductions other than commission. $125,000 / .95 = $131,578.94
(($131,600). $131,578.94 x .05 = $6,578.94 sales commission. $125,000 + $6,578.94 =
$131,578.94 ($131,600)
Question: A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised
at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first
month's interest?
$637.50
$7,650
$737.50
$6,750 - CORRECT ANSWER✔✔$637.50
$200,000 list price x 0.90 = $180,000 contract sales price. Since lender always uses the less of
the appraised value or the contract sales price, use $180,00 for the remainder of the
calculations. $180,000 contract sales price x 0.85 LTV = $153,000 loan. $153,000 loan x 0.05
interest rate = $7,650 annual interest. $7,650 ÷ 12 = $637.50 monthly interest payment for the
first month.
