Question 1

When should a purchase money mortgage properly be recorded?

Accepted Answer

A)   Before the deed
B)   After the deed
C)   At the same moment as the deed
D)   Upon full paymentE) B) and D)
F) A) and D)

Question 2

Choose the one most appropriate answer for each.
-an arrangement whereby a party providing financing gets a portion of the ownership

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) M) and T)
V) D) and N)

Question 3

Choose the one most appropriate answer for each.
-a loan wherein the lender makes monthly payments to the property owner who later repays in a lump sum

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) J) and T)
V) C) and P)

Question 4

A builder bought all 20 lots in a subdivision from the developer, who carried most of the purchase price on one loan. To sell the lots, he must include a

Accepted Answer

A)   reverse loan clause.
B)   sale-lease back clause.
C)   package mortgage clause.
D)   partial release clause.E) A) and D)
F) None of the above

Question 5

Choose the one most appropriate answer for each.
-the amount of time that elapses between interest rate changes on a loan

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) C) and O)
V) A) and T)

Question 6

Equity sharing is based on the concept of someone who has assets sharing those assets in exchange for

Accepted Answer

A)   a share of the ownership.
B)   tax benefits.
C)   both a and b.
D)   neither a nor b.E) A) and B)
F) B) and C)

Question 7

A loan arrangement whereby a lender extends a line of credit is

Accepted Answer

A)   a buy-down mortgage.
B)   an open-end mortgage.
C)   a wraparound mortgage.
D)   a purchase money mortgage.E) B) and D)
F) A) and D)

Question 8

For the borrower there are no disadvantages to an ARM loan.

Accepted Answer

A) True 
 B)False

Question 9

The phrase "taking back paper" applies to

Accepted Answer

A)   a cash sale.
B)   conventional loans.
C)   VA loans.
D)   seller financing.E) None of the above
F) C) and D)

Question 10

The objective of a graduated payment mortgage is to help borrowers pay off their loans more rapidly.

Accepted Answer

A) True 
 B)False

Question 11

Choose the one most appropriate answer for each.
-a debt instrument that encompasses existing mortgages and in subordinate to them

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) K) and M)
V) A) and B)

Question 12

With a ____________________ mortgage, the lender makes monthly payments to the homeowner.

Accepted Answer

The answer of With a ____________________ mortgage, the lender makes...

Question 13

With the ____________________ payment mortgage, the interest rate and maturity are fixed but the monthly payment gradually rises.

Accepted Answer

The answer of With the ____________________ payment mortgage, the interest...

Question 14

With a purchase made by an installment contract or land contract title immediately passes to the purchaser.

Accepted Answer

A) True 
 B)False

Question 15

The most popular index is the local bank prime rate.

Accepted Answer

A) True 
 B)False

Question 16

ARM loans with teaser rates are avoided by

Accepted Answer

A)   mortgage insurers.
B)   secondary market buyers.
C)   both a and b.
D)   neither a nor b.E) B) and D)
F) None of the above

Question 17

Choose the one most appropriate answer for each.
-a payment by the seller to the lender in order to reduce the interest for the buyer

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) A) and S)
V) A) and B)

Question 18

Choose the one most appropriate answer for each.
-a limit on how much a borrower's payment can increase in any one year

Accepted Answer

A)  adjustment period
B)  adjustable rate mortgage (ARM) 
C)  blanket mortgage
D)  blended-rate loan
E)  buy-down mortgageF) carryback financingG) contract for deedH) equity mortgageI) equity sharingJ) graduated payment mortgageK) interest rate capL) negative amortizationM) optionN) overencumbered propertyO) package mortgageP) payment capQ) reverse mortgageR) sale and leasebackS) subordinationT) wraparound mortgageU) E) and T)
V) H) and M)

Question 19

A mortgage taken by a seller from the buyer in part payment of the purchase price of real estate is known as

Accepted Answer

A)   seller financing.
B)   a conflict of interest.
C)   usury.
D)   a second trust deed.E) B) and D)
F) C) and D)

Question 20

An individual who is contemplating the purchase of a mortgage as an investment should have

Accepted Answer

A)   the property appraised.
B)   a credit check made on the borrower.
C)   the title searched.
D)   all of the above.E) All of the above
F) A) and B)

Exam 13: Types of Financing

An individual who is contemplating the purchase of a mortgage as an investment should have

Correct AnswerverifiedShow Answer

The phrase "taking back paper" applies to

Correct AnswerverifiedShow Answer

When should a purchase money mortgage properly be recorded?

Correct AnswerverifiedShow Answer

With a purchase made by an installment contract or land contract title immediately passes to the purchaser.

Correct AnswerverifiedShow Answer

ARM loans with teaser rates are avoided by

Correct AnswerverifiedShow Answer

Equity sharing is based on the concept of someone who has assets sharing those assets in exchange for

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -a loan wherein the lender makes monthly payments to the property owner who later repays in a lump sum

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -a debt instrument that encompasses existing mortgages and in subordinate to them

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -a payment by the seller to the lender in order to reduce the interest for the buyer

Correct AnswerverifiedShow Answer

A builder bought all 20 lots in a subdivision from the developer, who carried most of the purchase price on one loan. To sell the lots, he must include a

Correct AnswerverifiedShow Answer

With the ____________________ payment mortgage, the interest rate and maturity are fixed but the monthly payment gradually rises.

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -a limit on how much a borrower's payment can increase in any one year

Correct AnswerverifiedShow Answer

A mortgage taken by a seller from the buyer in part payment of the purchase price of real estate is known as

Correct AnswerverifiedShow Answer

A loan arrangement whereby a lender extends a line of credit is

Correct AnswerverifiedShow Answer

The most popular index is the local bank prime rate.

Correct AnswerverifiedShow Answer

With a ____________________ mortgage, the lender makes monthly payments to the homeowner.

Correct AnswerverifiedShow Answer

The objective of a graduated payment mortgage is to help borrowers pay off their loans more rapidly.

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -the amount of time that elapses between interest rate changes on a loan

Correct AnswerverifiedShow Answer

For the borrower there are no disadvantages to an ARM loan.

Correct AnswerverifiedShow Answer

Choose the one most appropriate answer for each. -an arrangement whereby a party providing financing gets a portion of the ownership

Correct AnswerverifiedShow Answer

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