Real Estate Finance and Mortgage Practices Quiz

Test your knowledge with 12 questions on mortgages, LTV, PMI, appraisals, and more in real estate finance.

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Which of the following is a common type of mortgage?

Fixed-rate mortgage

Variable-rate mortgage

Both a and b

None of the above

What does LTV stand for in real estate finance?

Loan to Value

Lease to Value

Landlord to Vendor

None of the above

Which entity typically provides mortgage loans?

Commercial banks

Investment banks

Credit unions

All of the above

What is Private Mortgage Insurance (PMI) used for?

To protect the lender in case of default

To protect the borrower in case of default

To cover closing costs

None of the above

What is a balloon mortgage?

A mortgage with a fixed interest rate for the entire term

A mortgage where monthly payments are initially low but a lump sum is due at the end

A mortgage with variable interest rates

A mortgage that can be prepaid at any time without penalty

What is the primary purpose of a real estate appraisal?

To determine the tax value of a property

To estimate the market value of a property

To assess the potential rental income of a property

To evaluate the structural integrity of a property

In real estate finance, what does the term 'amortization' refer to?

The process of increasing the loan balance over time

The process of decreasing the loan balance over time through periodic payments

The process of transferring ownership of a property

The process of negotiating a lower interest rate

What does PITI stand for in real estate finance?

Principal, Interest, Taxes, Insurance

Property, Investment, Term, Interest

Property, Income, Tax, Interest

None of the above

What is a prepayment penalty in a mortgage loan?

A fee charged if the borrower pays off the loan early

A fee charged if the borrower misses a payment

A fee charged if the borrower refinances the loan

A fee charged if the borrower makes a payment larger than the scheduled amount

#10

What is a collateralized mortgage obligation (CMO)?

A type of mortgage loan backed by collateral

A security backed by a pool of mortgage loans

A mortgage loan with adjustable interest rates

A type of mortgage loan that requires no down payment

#11

What is a mortgage-backed security (MBS)?

A loan provided directly to a borrower by a financial institution

A security backed by a pool of mortgage loans

A loan provided to a borrower by a government agency

A type of insurance for mortgage lenders

#12

What is the difference between a mortgage broker and a mortgage lender?

A broker provides loans directly to borrowers, while a lender connects borrowers with loans

A broker connects borrowers with loans, while a lender provides loans directly to borrowers

A broker is a financial intermediary, while a lender is a financial institution

There is no difference between a broker and a lender

Real Estate Finance and Mortgage Practices Quiz

Which of the following is a common type of mortgage?

What does LTV stand for in real estate finance?

Which entity typically provides mortgage loans?

What is Private Mortgage Insurance (PMI) used for?

What is a balloon mortgage?

What is the primary purpose of a real estate appraisal?

In real estate finance, what does the term 'amortization' refer to?

What does PITI stand for in real estate finance?

What is a prepayment penalty in a mortgage loan?

What is a collateralized mortgage obligation (CMO)?

What is a mortgage-backed security (MBS)?

What is the difference between a mortgage broker and a mortgage lender?

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