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🇺🇸 Real Estate Salesperson Licensing Exam · flashcards
Real Estate Salesperson Licensing Exam Financing Real Estate Transactions Flashcards
50 question-and-answer cards covering Financing Real Estate Transactions as it is examined in Real Estate Salesperson Licensing Exam. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.
24 sample cards from the Financing Real Estate Transactions deck
Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.
What is MIP on an FHA loan?
Mortgage Insurance Premium, which the FHA charges (both an upfront and an annual premium) to protect the lender against borrower default.
What is a VA loan and what is its key benefit?
A loan guaranteed by the Department of Veterans Affairs for eligible veterans/service members. Its key benefit is no required down payment and no monthly mortgage insurance.
What is a VA Certificate of Eligibility (COE)?
The document proving a veteran qualifies for a VA-guaranteed loan based on their service record; the lender requires it to process the loan.
What is the difference between a conventional loan and a government-backed loan?
A conventional loan is not insured or guaranteed by a government agency (FHA/VA/USDA); it follows private and Fannie Mae/Freddie Mac standards. Government-backed loans carry federal insurance or guarantees.
What is PMI and when is it required?
Private Mortgage Insurance, required on conventional loans when the down payment is less than 20% (LTV above 80%), protecting the lender against default.
Under the Homeowners Protection Act, when must PMI automatically terminate?
PMI automatically terminates when the loan balance reaches 78% of the original property value (and the borrower can request cancellation at 80% LTV).
What is a USDA Rural Development loan?
A government-guaranteed loan for eligible low-to-moderate income buyers in qualifying rural areas, often offering no down payment.
What is a purchase-money mortgage?
Seller financing where the seller extends credit to the buyer for part or all of the purchase price, taking back a note and mortgage instead of receiving full cash.
What is a wraparound mortgage?
A junior loan that 'wraps around' an existing first mortgage; the seller keeps paying the original loan while the buyer makes one larger payment to the seller on the new wraparound note.
What is a blanket mortgage and what clause typically accompanies it?
A single mortgage covering more than one parcel of property, often used by developers. It usually includes a partial release clause to free individual lots from the lien as they are sold.
What is a package mortgage?
A mortgage that finances both real property and personal property/fixtures (e.g., appliances, furniture) under one loan.
What is a construction loan and how are funds disbursed?
A short-term loan to finance building improvements, disbursed in installments called draws as stages of construction are completed and inspected.
What is the primary mortgage market?
The market where lenders originate loans directly to borrowers (banks, credit unions, mortgage companies make the loans).
What is the secondary mortgage market and why does it exist?
The market where existing loans are bought and sold among investors. It replenishes lenders' funds so they can make more loans, keeping money flowing and standardizing loan requirements.
Name the three main secondary mortgage market participants and their nicknames.
Fannie Mae (FNMA - Federal National Mortgage Association), Freddie Mac (FHLMC - Federal Home Loan Mortgage Corporation), and Ginnie Mae (GNMA - Government National Mortgage Association).
How does Ginnie Mae differ from Fannie Mae and Freddie Mac?
Ginnie Mae is a government-owned corporation that guarantees securities backed by government loans (FHA/VA/USDA). Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that buy mostly conventional loans.
What is a mortgage-backed security (MBS)?
An investment instrument representing a pooled group of mortgages; investors buy shares and receive income from the borrowers' principal and interest payments.
What does TILA (Truth in Lending Act) require, and what is the APR?
TILA requires lenders to disclose the true cost of credit so borrowers can compare loans. The APR (Annual Percentage Rate) expresses the total yearly cost of the loan including interest and certain finance charges.
Under TRID, which two disclosure forms must borrowers receive and when?
The Loan Estimate (within 3 business days of application) and the Closing Disclosure (at least 3 business days before closing). TRID merged TILA and RESPA disclosures.
What does RESPA regulate and what does it prohibit?
The Real Estate Settlement Procedures Act governs closing/settlement on residential loans, requires disclosure of settlement costs, and prohibits kickbacks and unearned referral fees (e.g., for steering business).
What does the Equal Credit Opportunity Act (ECOA) prohibit?
It prohibits discrimination in lending based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
What is redlining and which law addresses it?
Redlining is the illegal practice of denying or restricting loans in certain neighborhoods based on race or ethnic composition. It is prohibited by the Fair Housing Act and addressed by the Community Reinvestment Act and ECOA.
What do the front-end (housing) and back-end (total debt) qualifying ratios measure?
The front-end ratio compares the monthly housing payment (PITI) to gross monthly income; the back-end ratio compares total monthly debt payments (PITI plus other debts) to gross monthly income. Both gauge a borrower's ability to repay.
What does PITI stand for in qualifying a buyer?
Principal, Interest, Taxes, and Insurance - the four components of a typical total monthly mortgage payment used to qualify a borrower.
What this deck covers
The Financing Real Estate Transactions deck follows the Real Estate Salesperson Licensing Exam Financing Real Estate Transactions syllabus — 3 chapters and 10 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 16.7 cards per chapter.
Answers are written to be recallable, not just readable — averaging about 171 characters, which is long enough to carry the reasoning and short enough to say out loud.
A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.
Financing Real Estate Transactions flashcards FAQ
How many Financing Real Estate Transactions flashcards are in this Real Estate Salesperson Licensing Exam deck?
50 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.
Are these Real Estate Salesperson Licensing Exam flashcards free?
Yes. The preview here is free to read with no signup, and the full 50-card deck is free inside the Examius app.
What do the Financing Real Estate Transactions cards cover?
They follow the Real Estate Salesperson Licensing Exam Financing Real Estate Transactions syllabus — 3 chapters and 10 topics — so the questions track what is actually examinable.
How should I use these flashcards?
Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.