CHAMPIONS REAL ESTATE FINANCE EXAM ACTUAL EXAM 3 LATEST VERSIONS (VERSION A, B AND C) COMPLETE 350 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES|AGRADE

CHAMPIONS REAL ESTATE FINANCE EXAM 2023-2024

ACTUAL EXAM 3 LATEST VERSIONS (VERSION A, B AND C)

COMPLETE 350 QUESTIONS AND CORRECT DETAILED

ANSWERS WITH RATIONALES|AGRADE

VERSION A

What does the FHA mortgage insurance cover? - ANSWER- single

family, multi family and manufactured homes

What is the Fair Housing Act of 1968? - ANSWER- prohibits

discrimination based on race, color, national origin, sex, religions,

families with children and disabilities.

What is included in the PITI? - ANSWER- P and I, monthly taxes,

monthly insurance

What are the advantages of an FHA Loan - ANSWER- 1. Qualifying

ratios are more lenient

2. LTV's are very high (lower down payment)

Who can pay the points on an FHA loan? - ANSWER- Buyer or Seller

TVLB allows veterans to borrow? - ANSWER- Up to $150,000 to

purchase land and requires a minimum 5% down to purchase 1 acre or

more.

What is an Adjustable Rate Mortgage (ARM) - ANSWER- A loan

whose rate is adjusted, usually annually, based on the behavior of the

economic index with which it is associated (e.g., the Consumer Price

Index)

LTV (Loan to Value) - ANSWER- percentage of the lesser of the

appraised value or sales price that the lender will lend

LTV Calculation - ANSWER- Sales Price-80%= 20% Down Payment

Amortization - ANSWER- the reduction of a loan balance through

payments made over a period of time

What is required for all FHA transactions? - ANSWER- Escrow

Encumbrance - ANSWER- claim, lien, charge or liability attached to

and binding a real property.

What is the required down payment of an FHA loan - ANSWERUsually 3.5%

What are the requirements for VLB financing? - ANSWER- !. land must

be in TX

2. contain 1 acre or more

3. Have access to a public road.

4. Survey must have a field note description of the tract

5. Can't be zoned for commercial use

6. Can't be owned by another veteran or spouse within the previous 3

years.

Sales Comparison Approach (to an appraisal) - ANSWER- focus is on

recent sales in determining the value of the subject (also called

marketing data approach)

Cost Approach (to an appraisal) - ANSWER- considers how much a new

structure of this size/type would currently cost to build. Uses industry

and market price estimates for the land and building material.

Income Approach (to an appraisal) - ANSWER- Only used with the sale

is to an investor purchasing the home as a rental property.

Community Reinvestment Act - ANSWER- Requires banks to

demonstrate their commitment to local communities through lowincome lending programs and to provide annual reports to the public.

Redlining - ANSWER- refusing to provide financing in a particular area

due to its location.

What are 3 default remedies for the lender? - ANSWER- 1. Default

Related Fees

2. Damages to Credit Score

3. Foreclosure

Closing Disclosure (CD) - ANSWER- Document that replaces what

used to be called the truth in lending form. Informs the borrower about

everything pertinent about the loan; all costs associated with the

transaction.

Who insures the FHA? - ANSWER- Federal Housing Administration

(which is part of HUD)

What type of properties are eligible for FHA Loans? - ANSWERdetached and semi detached homes, multiplexes, row houses, and

individual condo units.

Lifting clause - ANSWER- A clause which gives the borrower the

ability to replace the primary instrument with another without affecting

the subordinate instrument's position.

Cross-default clause - ANSWER- if a borrower defaults on the primary

instrument the secondary instrument automatically defaults.

Subordinate Instruments - ANSWER- used to generate funds for a

borrow

lien - ANSWER- A right given by law to certain creditors to have their

debts paid out of the property of a defaulting debtor, usually by means of

a court sale.