#1
Which financing instrument is a type of loan where the borrower receives a lump sum upfront and pays back a fixed amount over a specified term?
Adjustable-rate mortgage (ARM)
Balloon mortgage
Reverse mortgage
Bridge loan
#2
What is a Real Estate Investment Trust (REIT) primarily designed to do?
Provide loans for real estate development
Invest in real estate properties and distribute rental income to investors
Insure real estate transactions
Manage homeowners' associations
#3
What is the primary function of a real estate appraiser?
To negotiate property deals
To estimate the market value of a property
To provide property insurance
To offer mortgage financing
#4
What is the primary purpose of a Home Equity Line of Credit (HELOC) in real estate financing?
To provide insurance for homeowners
To finance the purchase of a new home
To allow homeowners to borrow against the equity in their property
To offer fixed-rate mortgages
#5
What is the purpose of a 1031 Exchange in real estate?
To exchange properties with family members
To defer capital gains taxes on the sale of an investment property
To obtain a mortgage loan
To transfer ownership of a property
#6
What is Private Mortgage Insurance (PMI) commonly used for in real estate financing?
To insure the property against natural disasters
To protect the lender in case of borrower default
To provide life insurance for the borrower
To cover the borrower's closing costs
#7
Which of the following is a government-sponsored enterprise (GSE) that plays a crucial role in the secondary mortgage market?
Fannie Mae
Freddie Mac
FHA
VA
#8
Which of the following is an example of a non-recourse loan in real estate financing?
Personal loan
Mortgage-backed security
Bridge loan
Reverse mortgage
#9
What is the purpose of a 'due diligence' period in real estate transactions?
To finalize the mortgage interest rate
To thoroughly investigate the property before finalizing the deal
To determine property tax assessments
To negotiate the closing costs
#10
What does the term 'recourse' mean in the context of real estate financing?
The legal right to reclaim a property in case of default
A loan that requires personal liability for repayment
The process of refinancing a mortgage
A type of adjustable-rate mortgage
#11
What does the term 'loan-to-value ratio (LTV)' represent in real estate financing?
The ratio of the loan amount to the borrower's income
The ratio of the loan amount to the property's appraised value
The ratio of interest rate to loan amount
The ratio of loan duration to property size
#12
In real estate financing, what does the term 'amortization' refer to?
The process of obtaining a loan pre-approval
The gradual repayment of a loan through regular installments
The act of transferring ownership of a property
The assessment of property value by an appraiser
#13
In real estate, what does the term 'cap rate' (capitalization rate) represent?
The ratio of the loan amount to the property's appraised value
The rate of return on an investment property based on its income
The interest rate on an adjustable-rate mortgage
The percentage of the property value covered by a down payment
#14
What is the main purpose of a construction loan in real estate financing?
To finance the purchase of an existing property
To fund the construction or renovation of a property
To provide short-term financing for property flipping
To insure against property damage
#15
In real estate financing, what is the purpose of a 'deed of trust'?
To transfer ownership of the property
To secure the loan with the property as collateral
To provide title insurance
To determine property boundaries