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Course 771002- Real Estate Financing and Investment
  Final Exam
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771002v - Real Estate Financing and Investment

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Financial Planning
10 CPE Credit Hours

Final Exam
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Read 'Chapter 0: Course Material' & answer the following question(s):
1. The ____________ is referred to as a closing, settlement, or escrow.
2. Usury occurs when the lender
3. What types of credit transactions does Regulation Z cover? I) Credit in excess of $25,000; II) All real estate transactions involving consumers; III) All real estate transactions involving corporations
4. Regulation Z requires disclosure of credit information regarding: I) finance charges; II) APR; or III) date of closing?
5. Which of the following must be disclosed as a finance charge under Regulation Z?
6. The annual percentage rate (APR) is the annual cost of credit and is
7. A mortgage lender's practice of refusing to make mortgage loans in certain neighborhoods because of high risk or lack of profit potential is called
8. In order to prevent the practice of redlining and divestment in central city areas, Congress passed the ________________.
9. All federally chartered savings and loan associations must be members of the: I) Federal Home Loan Bank; II) Federal Deposit Insurance Corporation; III) Federal Reserve System; IV) Federal Savings Insurance System.
10. Fannie Mae and Freddie Mac operate in which mortgage market?
11. Which of the following is a buyer in the secondary mortgage market?
12. The mortgage purchase procedure used by the FNMA is conducted through an auction process referred to as a (an)
13. When using the fully amortized level payment mortgage
14. In a construction loan mortgage
15. The most predominant form of conventional mortgage is the
16. A conventional loan would differ from a FHA or VA loan in that the conventional mortgage loan would have
17. If a purchaser using FHA financing is paying more than the appraised value, the difference between the appraised value and the sales price
18. If the buyer gives a note or bond and a mortgage to the seller as part of the purchase price, the resulting mortgage is commonly referred to as a (an)
19. If the buyer of a home wanted to include in the terms of a mortgage the financing of such items as a stove, refrigerator and air conditioning, the mortgage used would be a (an)
20. A buyer agrees to purchase a tract of land for $40,000. The buyer is only able to get a mortgage for $32,000. Rather than let the deal fall through, the seller agrees to accept $4,000 cash and a note for the remaining $4,000. This is known as what?
21. A mortgage loan which gives the mortgages a fixed interest return plus a percentage of gross sales is called a (an)
22. ________________________ is NOT one of the indexes used in adjustable rate mortgage.
23. The term lenders use to describe the relative amount of money they will loan on a given piece of property is the
24. Before you invest any funds, you should evaluate
25. What is NOT a source of investment funds?
26. Which of the following is least important in making investment decisions?
27. Investment vehicles do NOT include
28. Which of the following is NOT an example of real assets?
29. A principal disadvantage of real estate is that it does NOT provide a hedge against
30. A rapid increase in inflation will cause interest rates to _________ , and bond and stock prices to __________.
31. The return on investment typically comes from two sources: __________ and capital gains (losses).
32. Current income is derived from income property by
33. An advantage to buying a home to the person who is to occupy it as his or her personal dwelling is its
34. Which of the following is NOT an advantage of buying has over renting?
35. Owning a(n) _____________ is still the best tax shelter there is.
36. Considerations in arriving at how much one should pay for a home include all the following EXCEPT
37. The most a typical home buyer should spend on housing costs is generally ___________ of his or her monthly take home pay
38. You should consider a fixed rate loan over an ARM, if you
39. The principle of maximizing the use of other people's money (OPM), providing a large percentage of return on a relatively small outlay is called
40. Depreciation taken as a deduction on annual income tax is a form of
41. Types of direct real estate investments consists of all the following EXCEPT
42. An example of commercial property is
43. One drawback to investing in real estate is the
44. __________________ is NOT a form of real estate investment
45. A closed end investment company that invests money in mortgages and various types of investment real estate is called
46. REITs differ from other real estate investments because
47. What type of REITs invests in income-producing properties?
48. Certain terms used in real estate investments have applications similar to those used in security analysis. For example, the price earnings (P/E) ratio found in the analysis of stocks is equivalent to _____________ in real estate investment analysis.
49. Which of the following is equal to before-tax cash flow from operations?
50. Calculate the capitalization rate for the following investment: Net operating income (NOI) = $18,750; Purchase price = $150,000; Equity = 20%
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