Real Estate Finance and Lending Fundamentals Quiz
Test your understanding of real estate finance fundamentals with these quiz questions covering financing sources, terms, and concepts.
#1
Which of the following is a common source of real estate financing?
Bank loans
Savings accounts
Credit cards
Payday loans
#2
What does LTV stand for in real estate finance?
Loan to Value
Land Tax Value
Lending Term Variation
Leasehold Tenancy Verification
#3
What is the primary purpose of a real estate appraisal?
To determine the property's market value for selling purposes
To assess the property's structural integrity
To evaluate the property's potential rental income
To verify the property's ownership history
#4
Which of the following is a common type of real estate investment?
Individual retirement account (IRA)
Health savings account (HSA)
Real estate investment trust (REIT)
Certificate of deposit (CD)
#5
What is private mortgage insurance (PMI) in real estate financing?
Insurance protecting the lender in case of borrower default on a conventional loan
Insurance covering damages to the property caused by natural disasters
Insurance covering the borrower's health and medical expenses
Insurance protecting the borrower against loss of employment
#6
What does the term 'amortization' refer to in real estate finance?
The process of paying off a loan over time
The legal process of property transfer
The initial payment made on a property
The rental income generated by a property
#7
Which of the following is NOT typically considered a factor in determining mortgage interest rates?
Borrower's credit score
Current economic conditions
The color of the property
Type of loan
#8
What is 'equity' in real estate finance?
The difference between the property's market value and the amount owed on the mortgage
The initial down payment made when purchasing a property
The interest accrued on a loan over time
The legal document outlining property ownership
#9
What role does a title company play in a real estate transaction?
Evaluating the property's market value
Handling the transfer of property ownership
Providing financing for the purchase
Conducting inspections of the property
#10
What is the role of Fannie Mae and Freddie Mac in real estate finance?
They provide mortgage insurance to borrowers
They regulate real estate transactions
They purchase and guarantee mortgages from lenders
They oversee property appraisals
#11
What is a 'balloon payment' in real estate finance?
A large, final payment on a loan
A type of payment made using balloons
A payment made to the seller before closing
A payment made towards property taxes
#12
What does 'prepayment penalty' refer to in real estate lending?
A fee charged for paying off a loan before its scheduled term
A fee charged for making a late payment on the loan
An additional fee charged for refinancing a loan
A fee charged for obtaining a mortgage pre-approval
#13
What is the purpose of a real estate escrow account?
To hold funds for property repairs
To manage rental income from the property
To hold funds for property taxes and insurance
To distribute profits from property sales
#14
What is a 'land lease' agreement in real estate?
An agreement between a landlord and tenant regarding property use
A lease agreement for agricultural land
An agreement for purchasing land
An agreement between neighbors to share land use rights
#15
What is a 'non-recourse loan' in real estate finance?
A loan where the borrower is not personally liable for repayment
A loan secured by multiple properties
A loan with a variable interest rate
A loan specifically for commercial real estate
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