Texas Real Estate Finance Practice Test

These questions are part of the practice quiz. Start practicing

• What is a Temporary Buydown?
• What is the significance of maintaining a low debt-to-income ratio for loan approval?
• What is commonly required by lenders before approving a mortgage?
• What is a common consequence of being underwater on a loan?
• What is one characteristic of a hard money loan?
• Which FHA ratio applies to monthly family debt to gross monthly income?
• What is a foreclosure?
• What is an escrow account?
• What is a "pre-approval" in the mortgage process?
• What are closing costs associated with?
• Which factor is most critical to determining a borrower's debt-to-income ratio?
• What is the main purpose of closing costs?
• Which of the following is NOT a benefit of FHA-insured loans?
• What is a credit score?
• Which act requires lenders to disclose the annual percentage rate and other loan terms?
• What is often the purpose of refinancing a mortgage?
• What is a common use for a mortgage contingency clause in a real estate purchase agreement?
• How is the loan-to-value ratio (LTV) calculated?
• What are the three C's of credit?
• What does a lender evaluate during the loan underwriting process?
• What is the main benefit of refinancing a mortgage?
• What must Veterans do to obtain a No-Downpayment Loan?
• In Texas, what is the maximum equity loan amount a homeowner can borrow?
• What is an interest-only loan?
• How many months’ worth of property taxes can be escrowed according to FHA guidelines?
• What type of loan is guaranteed by the US Department of Veterans Affairs?
• At what stage is the MIP typically charged?
• What is the implication of an adjustable-rate mortgage (ARM)?
• What is the primary benefit of refinancing?
• Who benefits from Discount Points?
• What is the primary role of underwriting in the mortgage process?
• What is the primary purpose of the Fed, the nation's central bank?
• What are the two main types of mortgages?
• What is the benefit of rolling the VA funding fee into the loan?
• What must a borrower do to avoid PMI on conventional loans?
• What is the function of a mortgage broker?
• What does "underwriting" refer to in the mortgage lending process?
• What was the primary purpose of the Real Estate Settlement Procedures Act (RESPA)?
• In Texas, when is a notice of default required to be sent to the borrower?
• What is a deficiency judgment?
• What is the primary function of the Texas Real Estate Commission (TREC)?
• Which document usually outlines the details of the MIP Rate?
• What does "subordination" mean in real estate finance?
• In a VA loan, what is the term for the Appraisal Report?
• How does the Federal Reserve influence real estate finance?
• What does MIP stand for in real estate financing?
• What regulatory body enforces the Texas Home Equity Law?
• Which of the following is a potential benefit of paying the VA Funding Fee upfront?
• What is the primary purpose of the Funding Fee in VA loans?
• Which types of loans do not impose a pre-payment penalty?
• Who is eligible for the financial programs provided by the Texas VLB?
• Which of the following best describes the situation of being 'underwater' on a mortgage?
• What are the two main aspects an Underwriter evaluates before approving a loan?
• What is a Release of Lien?
• Which type of loan typically requires an MIP?
• What is one key benefit of obtaining title insurance?
• What does the VA FF Rate stand for in the context of real estate finance?
• What does the term "underwater" refer to in the context of a mortgage?
• What is the purpose of title insurance?
• How can a borrower enhance their credit score effectively?
• What is loan underwriting?
• What does APR stand for in real estate financing?
• How can a veteran utilize the Texas VLB's loan benefit?
• What is the typical term duration for a fixed-rate mortgage in Texas?
• What is the primary function of a title company in real estate transactions?
• What is the maximum debt-to-income ratio allowed for a Veteran?
• In mortgage finance, what are fees typically associated with?
• Who is identified as the Mortgagor in a loan?
• What are the conventional loan qualifying ratios for a home payment to gross income and total debt to income?
• What is a negatively amortized loan also known as?
• What is an "interest-only" mortgage?
• What is a key feature of a fixed-rate mortgage?
• What type of insurance protects the lender against a borrower's default?
• Who establishes the MIP Rate for FHA loans?
• What is the VA Funding Fee percentage for most transactions?
• In Texas, what is the maximum loan-to-value ratio for conventional loans without private mortgage insurance?
• In Texas, which documentation is typically needed to verify income for a mortgage application?
• What does a short sale involve?
• Which document outlines the terms of a mortgage loan?
• In the context of real estate loans, what does "amortization" mean?
• What is the primary benefit of using a conventional loan?
• Which term describes the initial amount of the loan taken out to purchase a property?
• Which federal law requires disclosure of loan terms to borrowers?
• Under Texas law, what is the minimum number of days that a borrower has to be notified of a foreclosure?
• What does Loan to Value Ratio indicate?
• What is the purpose of a deed of trust?
• What is a Deed of Trust?
• What is a lien?
• Which of the following is NOT a purpose of the FHA Loan Program?
• Before collecting additional fees, what two disclosure statements must a lender provide to a borrower?
• What does it mean if a property is "underwater"?
• What is a non-conforming loan?
• What type of loan is typically more accessible to first-time buyers?
• What is the typical range for a down payment on a conventional loan?
• What must an Independent Contractor for residential loans do?
• What does a "point" represent in real estate financing?
• What does FHA stand for in real estate financing?
• On a HUD-1 closing statement, the buyer's mortgage is shown as what type of entry for the buyer?
• What factor primarily defines an underwater mortgage?
• What is the MIP Rate typically expressed as a percentage?
• What is the UFMIP Rate for FHA loans?
• What measures a borrower's willingness to pay off their monthly debt?
• What does the term "equity" refer to in real estate finance?
• What could result from failing to pay the MIP for an FHA loan?
• For which type of property is the VA Funding Fee applicable?
• Which of the following is a characteristic of FHA loans?
• What is the purpose of Secondary Market Players such as Fannie Mae and Freddie Mac?
• What is the primary focus of the Texas Real Estate Commission (TREC)?
• What does being underwater imply about a homeowner's equity?
• Which type of loan adjusts interest rates periodically based on an index?
• What are closing costs?
• Which entity is primarily responsible for regulating mortgage lenders in the U.S.?
• What does the term "title insurance" typically protect against?
• What does "equity stripping" refer to?
• What is the primary role of mortgage brokers in real estate finance?
• Why is the MIP Rate important in real estate finance?
• What is a balloon mortgage?
• Which institution provides financial benefits specifically for Texas veterans?
• What is the FHA monthly payment acronym used to represent principal, interest, taxes, and insurance?
• What does a balloon mortgage require at the end of the mortgage term?
• What role do title searches play in real estate transactions?
• What does the deficiency judgment allow the mortgagee to do?
• What is a wraparound mortgage?
• What is an adjustable-rate mortgage (ARM) typically tied to?
• What is a balloon mortgage?
• Which of the following is a benefit of the Texas VLB loans?
• Which of the following best describes a balloon mortgage?
• Which act established the Consumer Financial Protection Bureau?
• What are "conforming loans"?
• Which of the following is NOT typically included in monthly mortgage payments?
• How does a VA loan benefit eligible veterans?
• Which types of loans are known to be assumable?
• What is a mortgage contingency clause?
• What is a mortgage commitment?
• Why might a homeowner choose to investigate the Texas VLB loan options?
• What can affect the interest rate on a mortgage?
• Which loan type would likely have a lower Funding Fee?
• What is a characteristic feature of a Buyer's Market?
• In real estate finance, what is a debt service coverage ratio (DSCR)?
• What is the purpose of the Good Faith Estimate (GFE)?
• What is considered a low-income borrower according to federal guidelines?
• What is a lien?
• Why do various lenders have different closing fees?
• What does "disclosure" refer to in the mortgage lending process?
• What does the Truth in Lending Act (Regulation Z) require lenders to do?
• Who is referred to as the Mortgagee?
• What is the significance of a down payment in a mortgage?
• Which of the following is required from Independent Contractors in residential loans?
• Which financial ratio indicates how much of a borrower’s income goes to servicing debt?
• What is one consequence for borrowers who do not pay the VA Funding Fee?
• What is the maximum amount of time a borrower has to cure a default under Texas law before foreclosure?
• What does the term "positive equity" mean?
• What does the term "amortization" refer to?
• Which document must lenders provide to borrowers under the Mortgage Disclosure Improvement Act?
• What does the term 'Capacity' refer to in the 4 Cs of lending?
• What is the primary purpose of a mortgage?
• Which program is specifically aimed at assisting Texas veterans with property purchases?
• What is the primary advantage of a VA loan for eligible borrowers?
• What is an FHA loan primarily designed for?
• What is the primary function of Fannie Mae and Freddie Mac?
• What is a reverse mortgage designed for?
• Which factor typically leads to a higher mortgage interest rate?
• What is the primary function of the primary mortgage market?
• What does "clause" mean in a mortgage agreement?
• What does Lien Theory imply about property ownership during a mortgage?
• What criteria does the federal government use to define low-income borrowers?
• Which program is specifically aimed at rural property buyers?
• What does APR stand for and why is it important?
• What defines "jumbo loans"?
• What is an advantage of a short-term loan compared to a long-term loan?
• What is the main purpose of an Acceleration Clause in a Deed of Trust?
• What is the role of the Federal Housing Administration (FHA) in mortgage lending?
• In Texas, how long does a lender have to provide a Borrower’s Last Disbursement Notice?
• What does PMI stand for and when is it required?
• What is typically included in the closing costs of a real estate transaction?
• Which of the following is a role of the Federal Reserve in the housing market?
• What advantage does a Nonrecourse Real Estate Loan provide?
• What type of mortgage has an interest rate that can change over time?
• What is a loan origination fee?
• What does the term "debt-to-income ratio" (DTI) measure?
• What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage?
• Which of the following is NOT a basis for discrimination under the Federal Equal Credit Opportunity Act?
• In real estate, what does the term "title" refer to?
• What is required in the disclosure documents before a residential mortgage can be funded?
• Which of the following describes a loan that increases over time?
• What is the main purpose of the Equal Credit Opportunity Act (ECOA)?
• What can happen if a borrower fails to make mortgage payments?
• What is the FHA qualifying ratio for home payment to gross monthly income?
• What type of loan is provided by the Texas Veterans Land Board (Texas VLB)?
• How can a Veteran fully restore their entitlement?
• What happens when a borrower pays points on a loan?
• The Federal Equal Credit Opportunity Act prohibits discrimination based on which of the following?
• Why might a buyer choose to pay points on their mortgage?
• What is a key component assessed when determining a borrower's credit worthiness?
• What does a first lien represent in real estate financing?
• How much of the loan amount does the DVA guarantee against foreclosure losses?
• What does LTV stand for in real estate finance?
• What is an escrow account used for?
• What is the process of pledging property as collateral without giving up possession called?
• For conventional mortgage loans without PMI, what is typically the minimum down payment required?
• What is the purpose of a rate lock in mortgage financing?
• In the context of lending, what does PMI stand for?
• What is a Nonrecourse Real Estate Loan?
• How is the value of a property generally determined for financing purposes?
• What are Compensating Factors in loan qualification?
• What is the primary goal of the FHA Loan Program?
• What characterizes a Buyer's Market?
• How is interest calculated on a mortgage loan?
• Which of the following is an example of a secondary loan structure?
• What is the primary purpose of an appraisal in the mortgage process?
• Which of the following best describes the impact of the Federal Reserve's interest rate decisions?
• What is the purpose of the Good Faith Estimate?
• What does FHA require lenders to escrow for under a borrower's monthly payments?
• Which of the following is typically NOT included in the closing costs?
• What does the Mortgage Disclosure Improvement Act require lenders to do?
• What is a Contract for Deed?
• What does PMI stand for in real estate finance?
• What is the main benefit of a VA loan?
• What is the maximum contribution a seller can make to assist an FHA borrower, expressed as a percentage of the property's sale price?
• What is the primary governing body of real estate finance in Texas?
• What does the term "satisfaction of mortgage" indicate?
• What defines a second mortgage?
• What does private mortgage insurance (PMI) protect?
• How do points affect a mortgage loan?
• What is another name for an Alienation Clause in a Deed of Trust?
• How is the MIP calculated?
• What is a temporary buy-down in mortgage financing?
• What is a "real estate owned" (REO) property?
• What is the purpose of a TILA-RESPA Integrated Disclosure (TRID)?
• What is a potential risk for homeowners with underwater mortgages?
• What is a hard money loan?
• What is the primary purpose of a home inspection?
• What is a prepayment penalty?
• What is the current maximum loan to value ratio for FHA loans?
• What does a USDA loan support?
• For a mortgage to be valid in Texas, what is required?
• How can borrowers improve their chances of loan approval?
• Is a tax service fee allowed to be paid by a borrower under FHA guidelines?
• What is a reverse mortgage designed for?
• What type of mortgage typically requires PMI?
• What are the 4 Cs in residential lending that lenders assess?
• What differentiates a loan assumption from a loan novation?
• Which of the following is a responsibility of the Consumer Financial Protection Bureau?
• What are Discount Points?
• What is an escrow account?
• What is one benefit of securing a mortgage with a deed of trust?
• What is a home equity line of credit (HELOC)?
• Under Texas law, what is the required cooling-off period for home equity loans?
• What is the significance of the Texas Mortgage Disclosure Act?
• What is the primary difference between "points" and "fees" in mortgage financing?
• What does Private Mortgage Insurance (PMI) insure against?