#1
What does the term 'amortization' refer to in real estate finance?
The process of transferring ownership of a property
The gradual repayment of a loan over time
The calculation of property taxes
The assessment of property value
#2
In the context of real estate finance, what does the acronym 'LTV' stand for?
Loan Term Valuation
Loan-to-Value
Lien-to-Value
Lease Term Variance
#3
What does the term 'underwriting' mean in real estate financing?
The process of marketing a property for sale
The assessment of a borrower's creditworthiness and risk
The negotiation of loan terms between the borrower and lender
The legal transfer of property ownership
#4
What is a common characteristic of a fixed-rate mortgage?
The interest rate changes periodically
The monthly payments remain constant over the life of the loan
The loan is typically interest-only for a set period
The loan term is usually shorter than other types of mortgages
#5
What does the term 'escrow' refer to in real estate transactions?
The legal process of transferring property ownership
A financial arrangement where a third party holds funds on behalf of the buyer and seller
The negotiation of loan terms between the borrower and lender
The process of assessing property value
#6
Which entity typically sets the minimum down payment requirements for mortgages in the United States?
Federal Reserve
Department of Housing and Urban Development (HUD)
Federal Housing Finance Agency (FHFA)
Consumer Financial Protection Bureau (CFPB)
#7
What is a Debt-Service Coverage Ratio (DSCR) used for in real estate finance?
To measure a property's ability to generate income
To assess a borrower's creditworthiness
To determine the loan-to-value ratio
To evaluate a property's liquidity
#8
What is the purpose of the Truth in Lending Act (TILA) in the United States?
To regulate the advertising of real estate properties
To ensure fairness and accuracy in credit transactions
To establish property appraisal standards
To enforce zoning regulations
#9
What is Private Mortgage Insurance (PMI) typically required for?
Loans with a loan-to-value ratio below 80%
Loans with a loan-to-value ratio above 80%
Government-backed loans only
Commercial real estate loans
#10
What is a balloon payment in the context of real estate financing?
A payment made by the borrower to reduce the principal amount of the loan
A large, lump-sum payment due at the end of a loan term
A payment made by the lender to the borrower as an incentive
A payment made to the government for property taxes
#11
What regulatory body oversees the regulation of mortgage lenders and servicers in the United States?
Securities and Exchange Commission (SEC)
Federal Reserve
Consumer Financial Protection Bureau (CFPB)
Federal Housing Administration (FHA)
#12
What is the primary purpose of a Real Estate Investment Trust (REIT)?
To provide mortgage loans to homebuyers
To develop residential properties
To invest in and manage income-producing real estate
To regulate property taxes
#13
Which entity regulates the secondary mortgage market in the United States?
Federal Housing Administration (FHA)
Department of Housing and Urban Development (HUD)
Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac)
Consumer Financial Protection Bureau (CFPB)
#14
Which of the following is a type of real estate appraisal method?
Interest-based appraisal
Comparable sales approach
Debt-to-income ratio appraisal
Property tax assessment
#15
What does the term 'debt-to-income ratio' (DTI) represent in real estate lending?
The ratio of rental income to property expenses
The ratio of a borrower's monthly debt payments to their gross monthly income
The ratio of loan principal to property value
The ratio of property taxes to property value