National and UST Mortgage Practice
Exam 2: Multiple Choice Questions and
Answers Graded A+
Which of the following fees would NOT be used in calculating the APR?
Closing fee
Underwriting fee
Mortgage insurance
Title insurance - Correct answer-The answer is title insurance. The annual
percentage rate (APR) represents the relationship of the total finance charge to the
total amount financed, as a yearly rate. It is not the same as the nominal rate (i.e.,
the interest rate shown in the note), as it includes all finance charges, not just
interest. Among other charges, finance charges include points, loan fees, and
mortgage insurance premiums, but not title insurance premiums.
Richie Rich has been approved for a 90% loan. Richie is under contract to
purchase a home for $400,000 and put $5,000 earnest money down with the
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, contract. If Richie's lender is charging 1% origination, 1% discount, and the title
company fees total $1,350, how much does Richie need to bring to closing?
$49,350
$46,850
$43,550
$48,550 - Correct answer-The answer is $43,550. 90% LTV means Richie will
need to bring 10% of the purchase price, or $40,000, to closing, minus the $5,000
he already paid as earnest money. To this he must add 1% of the $360,000 loan
amount, or $3,600, for the 1% origination fee, and an additional 1% of the loan
amount ($3,600) for the discount. Finally, he must add the $1,350 title charge:
$40,000 − $5,000 + $3,600 + $3,600 + $1,350 = $43,550.
A(n) _____ is an individual who accepts a fee to falsely claim ownership to a
property.
Straw buyer
Air buyer
Straw seller
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
Exam 2: Multiple Choice Questions and
Answers Graded A+
Which of the following fees would NOT be used in calculating the APR?
Closing fee
Underwriting fee
Mortgage insurance
Title insurance - Correct answer-The answer is title insurance. The annual
percentage rate (APR) represents the relationship of the total finance charge to the
total amount financed, as a yearly rate. It is not the same as the nominal rate (i.e.,
the interest rate shown in the note), as it includes all finance charges, not just
interest. Among other charges, finance charges include points, loan fees, and
mortgage insurance premiums, but not title insurance premiums.
Richie Rich has been approved for a 90% loan. Richie is under contract to
purchase a home for $400,000 and put $5,000 earnest money down with the
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, contract. If Richie's lender is charging 1% origination, 1% discount, and the title
company fees total $1,350, how much does Richie need to bring to closing?
$49,350
$46,850
$43,550
$48,550 - Correct answer-The answer is $43,550. 90% LTV means Richie will
need to bring 10% of the purchase price, or $40,000, to closing, minus the $5,000
he already paid as earnest money. To this he must add 1% of the $360,000 loan
amount, or $3,600, for the 1% origination fee, and an additional 1% of the loan
amount ($3,600) for the discount. Finally, he must add the $1,350 title charge:
$40,000 − $5,000 + $3,600 + $3,600 + $1,350 = $43,550.
A(n) _____ is an individual who accepts a fee to falsely claim ownership to a
property.
Straw buyer
Air buyer
Straw seller
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
