NC Test Prep Unit VII - Real Estate Contracts & Agency (N)

What is a lien-theory state?

• A state in which a mortgagee holds legal title to a secured property.

• A state in which a mortgagee has equitable title to a secured property.

• A state that allows a real estate owner's creditors to record liens against the owner's property.

• A state in which a lien is considered as a conveyance.

What is the function of a note in a mortgage or trust deed financing arrangement?

• It is the lender's security instrument in the collateral property.

• It is evidence of ownership of the mortgage or trust deed.

• It contains the borrower's promise to maintain the value of the property given as collateral for a loan.

• It is evidence of the borrower's debt to the lender.

When homebuyer Henry pledges his newly purchased home as collateral for a mortgage loan, the evidence of the pledge is the

• trust deed or mortgage.

• promissory note.

• loan commitment.

• loan receipt.

The borrower in a mortgage loan transaction is known as the

• mortgagee.

• mortgagor.

• lienor.

• trustee.

If a borrower obtains an interest-only loan of $200,000 at an annual interest rate of 6%, what is the monthly interest payment?

• 1200

• 600

• 500

• 1000

If a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 6% is $5,000, how much was the loan amount?

• 720000

• 1000000

• 1200000

• 500000

A borrower of a $250,000 interest-only loan makes annual interest payments of $18,750. What interest rate is the borrower paying?

• 7.5%.

• .75%.

• 3.75%.

• 8.5%.

Maria borrows $600,000 and pays two points for the loan. How much does she pay in points?

• 1200

• 12000

• 7200

• It depends on the interest rate.

Which of the following is true of an amortizing loan?

• The amount of annual interest paid is the same for every year of the loan term.

• Part of each periodic payment is applied to repayment of the loan balance in advance and part is applied to payment of interest in arrears.

• Except for any points that may be paid, the interest on the loan balance is usually paid in advance.

• The interest rate is reduced each year to maintain equal payments even though the outstanding loan balance is smaller.

For a loan that is not backed by the Federal Housing Administration or Veterans Administration, and for which the borrower is making a down payment of less than 20%, the lender is likely to require the borrower to obtain

• a subrogation agreement.

• private mortgage insurance.

• a letter of credit.

• a co-signer on the note.