#1
Which of the following is NOT a common real estate financing option?
Mortgage
Bridge loan
Car loan
Hard money loan
#2
What type of financing typically requires a borrower to pay back the loan in fixed monthly installments over a set period?
Adjustable-rate mortgage
Balloon mortgage
Amortizing loan
Interest-only loan
#3
What does the term 'pre-approval' mean in real estate financing?
Borrower is guaranteed to receive a loan at a specified interest rate
Borrower has been conditionally approved for a loan pending further verification
Borrower has paid off their existing mortgage loan
Borrower has been denied a loan due to poor credit history
#4
What is the typical down payment percentage for a conventional mortgage?
#5
Which of the following is a characteristic of an FHA loan?
Requires a high credit score
Requires a large down payment
Backed by the Federal Housing Administration
Only available for investment properties
#6
Which of the following is a characteristic of a government-backed mortgage loan?
Higher interest rates
Lower down payment requirements
Longer repayment terms
Flexible credit score criteria
#7
What is the primary purpose of a bridge loan in real estate?
To finance the purchase of a new property before selling an existing one
To provide long-term financing for commercial real estate
To secure funding for residential construction projects
To refinance existing mortgage loans
#8
Which of the following is a characteristic of an interest-only loan?
Fixed monthly payments
Borrower pays only interest for a specified period
Principal balance decreases over time
Typically has a shorter loan term
#9
What is the purpose of private mortgage insurance (PMI) in real estate financing?
To protect the lender in case of borrower default
To cover property taxes
To pay for home repairs
To finance the purchase of investment properties
#10
Which of the following statements is true regarding a fixed-rate mortgage?
Monthly payments can fluctuate based on interest rate changes
Interest rate remains constant throughout the loan term
Initial interest rate is typically lower than adjustable-rate mortgages
Only available for government-backed loans
#11
Which of the following is a characteristic of a recourse loan in real estate financing?
The lender can seize the collateral in case of default but cannot pursue the borrower's other assets
The borrower is not personally liable for repayment in case of default
The loan is fully backed by the government
The lender can pursue the borrower's other assets beyond the collateral in case of default
#12
What does the term 'points' refer to in real estate financing?
Percentage of the loan amount paid upfront to reduce the interest rate
Monthly payments made to the lender
Insurance payments made by the borrower
Fees paid to the real estate agent
#13
In real estate financing, what does LTV stand for?
Loan-to-Value
Long-Term Value
Loan-Termination Value
Loan-Transfer Volume
#14
What is the primary function of a real estate investment trust (REIT)?
To provide loans for real estate purchases
To develop residential properties
To manage and invest in income-generating real estate
To offer mortgage insurance
#15
In real estate financing, what does the term 'amortization' refer to?
The process of gradually paying off a loan over time through regular payments
The initial period during which only interest payments are made
The increase in property value over time
The ratio of the loan amount to the appraised value of the property
#16
Which of the following is a characteristic of a reverse mortgage?
Borrower must make monthly mortgage payments
Available only for individuals under the age of 55
Homeowner receives payments from the lender based on equity in the home
Loan amount is determined based on the borrower's income
#17
What is the purpose of a collateralized debt obligation (CDO) in real estate financing?
To provide insurance for mortgage loans
To bundle mortgage-backed securities and sell them to investors
To finance the purchase of commercial properties
To refinance existing mortgage loans
#18
What is the purpose of a deed of trust in real estate financing?
To transfer ownership of the property to the lender
To provide security for the repayment of the loan
To set the terms of the mortgage agreement
To determine the property's appraised value