GEORGIA MLS PRACTICE EXAM (QUESTIONS & ANSWERS) 100% CORRECT ANSWERS LATEST 2024/2025 (A, Exams of Nursing

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GEORGIA MLS PRACTICE EXAM (QUESTIONS

& ANSWERS) 100% CORRECT ANSWERS

LATEST 2024/2025 (A+ RATED VERIFIED BY

EXPERTS)

When should a licensee disclose to the parties whom their firm intends to represent in a transaction? - CORRECT ANSWER>>Disclosure should be made verbally and in writing to all parties as soon as possible. A selling broker desires to represent a purchaser in a real estate transaction while at the same time act as a subagent of the listing broker and seller. Could the broker perform both of these functions in the same transaction? - CORRECT ANSWER>>No, when a broker working with a buyer acts as a subagent of the listing broker and seller, that broker working with a buyer must represent the seller and treat the buyer as a customer Whether or not a real estate sales affiliate in GA may act as a buyer's agent will be determined by: - CORRECT ANSWER>>the company policy and procedures manual issued to all sales affiliates by the broker Under what circumstances might a broker who is working with a prospective buyer receive compensation/commission from a listing broker? - CORRECT ANSWER>>Only if there is a cooperating agreement between the two brokers. You are a salesperson representing the seller. What are your duties when working with a buyer/customer? - CORRECT ANSWER>>You must deal with them honestly A brokerage engagement in GA creates an employment agreement between: - CORRECT ANSWER>>Broker and client Regarding the Brokerage Relationship in Real Estate Transaction ACT (BRRETA), how are agency relationships created? - CORRECT ANSWER>>Agency relationships may be created only through written brokerage engagements Under a listing agreement, the primary agency relationship involves: - CORRECT ANSWER>>the seller as the principal, and the broker as the agent

A property is listed for $200,000. The sellers owe $100,000 on their current loan and have agreed to pay $2000 towards closing costs for the sale of the property. The sellers also agree to pay the listing broker a 6% commission should a ready, willing and able buyer be secured to purchase the property. If the property sells for full price, what will be the net proceeds for the sellers? - CORRECT ANSWER>>$86, According to BRRETA, a listing agent must voluntarily disclose to a buyer customer: - CORRECT ANSWER>>known latent defects Instructed by a client not to present any offers substantially below the listing price, an agent decides not to inform the seller of a prospective buyer's "low ball" written offer. Would real estate agency law find the licensee's decision acceptable? - CORRECT ANSWER>>No, the agent must present all offers to the seller client You have agreed with your broker to split commissions 60% to you and 40% to your broker. Your listing was just sold by another company for $139,000. Your broker has agreed to pay the selling broker 50% of any commission. If the commission on this sale was 6% what was your share of the commission? - CORRECT ANSWER>>$ A broker who has a brokerage relationship with both seller and buyer or both landlord and tenant in the same transaction is considered a - CORRECT ANSWER>>dual agent As a representative of an employing broker, a real estate salesperson in GA must act in the best interest of a client as well as in accordance with all applicable laws. With regard to these duties and responsibilities, the obligations of a real estate salesperson might best be stated as follows:

• CORRECT ANSWER>>A salesperson's highest obligation is to any applicable laws, next to the broker, and then to the client You are working as an agent for the broker. In this relationship the broker dictates office hours, work schedules, withholds federal and state taxes, and pays FICA contributions. This relationship would be considered: - CORRECT ANSWER>>employer/employee As an independent contractor for a brokerage firm, a licensee - CORRECT ANSWER>>must have a written employment agreement/contract with the broker In a real estate transaction involving a broker and a broker's salesperson, there are 2 agency relationships established. These agency relationships are between the - CORRECT ANSWER>>broker and principal, and broker and salesperson

If the salesperson is an agent for the broker, can the salesperson sign brokerage engagements? - CORRECT ANSWER>>Yes, the authority to sign brokerage engagements is typically provided to the salesperson in the broker affiliation agreement A seller enters into an exclusive brokerage engagement with the agreement that if the owner sells the property personally, no commission will be paid to the agent. This engagement is called

• CORRECT ANSWER>>an Exclusive agency agreement Common law principles will typically terminate a contract between the broker and principal/client in which of the following circumstances? - CORRECT ANSWER>>Either the broker or principal declares bankruptcy A listing broker whose negligence in preparing a sales contract for the seller client allows the buyer to void the agreement, breaches an agent's responsibility of - CORRECT ANSWER>>due care A listing agent shows a buyer customer a client's home in a residential subdivision. The agent knows that an owner of a parcel of vacant land one half mile from this subdivision recently received zoning permission to operate a waste disposal facility on that property. Under BRRETA, would the agent need to voluntarily disclose this information to the buyer? - CORRECT ANSWER>>Yes, as the pending waste disposal site is within 1 mile, BRRETA considers it a material fact for the buyer. A broker representing a seller who gives a list of lenders, inspectors, attorneys and schools to prospective purchaser would be performing: - CORRECT ANSWER>>ministerial acts The brokerage engagement created between a buyer and a broker who is assisting the buyer in finding a suitable property to purchase can best be described as: - CORRECT ANSWER>>special/limited agency When a prospective buyer at an open house held by the listing agent asks for advice on negotiating a good price with the seller, the agent might best respond by treating the buyer as a
• CORRECT ANSWER>>customer Prior to entering into a brokerage engagement, an agent's disclosure of the types of agency relationships offered by the broker as well as how the broker receives and shares compensation

with the other brokers is required by: - CORRECT ANSWER>>BRRETA, Georgia's real estate agency law According to the common laws of real estate agency, a fiduciary relationship exists between the:

• CORRECT ANSWER>>listing broker and seller/client A broker in GA is paid a commission at closing by the principal and refuses to pay the salesperson the portion of the commission as agreed upon in the written affiliation agreement. IF the salesperson does not believe that the broker is meeting the terms of the agreement, the appropriate action would be to: - CORRECT ANSWER>>file judicial action or refer matter to other arbitrating bodies A property owner tells the listing agent that she would like to net $75,000 from the sale of her home. If the commission negotiated between the agent and seller is 7%, which of the following sales prices for the home would come closest to satisfying the owner's goal? - CORRECT ANSWER>>$80, The best description of the type of agency that is created by the actions and conduct of the parties involved would be: - CORRECT ANSWER>>implied agency Which of the following is a requirement of an independent contractor status between a broker and a salesperson? - CORRECT ANSWER>>The salesperson must enter into a written agreement with the broker stating the individual will not be treated as an employee for federal tax purposes. Is it possible in a single agency for the agent to represent both a buyer and seller in the same transaction? - CORRECT ANSWER>>No, single agents cannot practice dual agency The law that requires business locations to reserve a certain number of convenient parking spaces for the handicapped is: - CORRECT ANSWER>>The Americans with Disabilities Act A prospective purchaser is Caucasian, asks a salesperson what percentage of the families in a particular area is African American. The salesperson's best course of action would be: - CORRECT ANSWER>>to refer the purchaser to an appropriate agency such as the public schools administration

A real estate broker would violate anti-trust laws in which of the following situations? - CORRECT ANSWER>>The brokerage firm establishes a joint policy with other brokers in the area to charge a standard real estate commission of 7% When a licensee is making a listing presentation and the seller is questioning the rate of commission the salesperson wants to charge, Federal Anti-Trust law indicates the best reply would be - CORRECT ANSWER>>"this is my company's policy" A real estate licensee working with an Asian buyer would violate Fair Housing laws for refusing to show a property in which of the following circumstances? - CORRECT ANSWER>>When the seller has indicated he wants the property shown only to Hispanic buyers The Federal Lead-Based Paint Law requires the owners of property with improvements built prior to 1978 to do all of the following except - CORRECT ANSWER>>remove all lead-based paint from the property You are a licensed salesperson working with an out of town Arab client who has identified a home he wants to see in a neighborhood that you know is predominately Jewish. You should: - CORRECT ANSWER>>show the property Which of the following statements is true regarding the CAN-SPAM act? - CORRECT ANSWER>>Unsolicited commercial emails must include an opt-out clause for the recipient and must be honored by sender within 10 business days A licensee would be in violation of fair housing laws if he refused to show properties to a family because - CORRECT ANSWER>>There are seven children in the family An exception to the Federal Fair Housing Act of 1968, sometimes known as the Mrs. Murphy Exemption, may be allowed under which of the following circumstances? - CORRECT ANSWER>>The property owner lives in one unit of a triplex and does not use a broker or any discriminatory ads to find tenants for the other 2 apartments A real estate broker is managing an apartment complex for an investor. The licensed affiliate acting as a rental agent for the broker would be in violation of fair housing laws for refusing to rent an apartment if: - CORRECT ANSWER>>the applicant was a recovering alcoholic Charlie is a Vietnamese immigrant who has subdivided his lot and built a new house next to his existing home. In listing this new house, Charlie asks that his real estate agent look for a

Vietnamese purchase. How might the sales agent proceed with regard to his client's request? - CORRECT ANSWER>>The agent should advise the client that the listing may not be taken under this guideline. Under what circumstance might a real estate agent call an individual to discuss listing that person's home if that person's name appears on the Do-Not-Call-Registry? - CORRECT ANSWER>>Only if the individual has contacted the brokerage firm for information within the last 3 months Under the ADA, an employer may deny a handicapped person a job if: - CORRECT ANSWER>>The handicapped person is not qualified to do the specific work required Which of the following statements best explains the Civil Rights Act of 1866 as it affects real estate activity? - CORRECT ANSWER>>The law prohibits discrimination based on race in all real estate transactions A real estate salesperson's affilitation with a broker as an independent contractor or as an employee would depend on: - CORRECT ANSWER>>the affiliation agreement between the salesperson and the broker The only party that can release a seller from a listing agreement is the - CORRECT ANSWER>>listing broker Alan, a real estate broker, lists Miranda's home for $189,500. Later that day, Claude comes into Alan's office and asks for general information about homes for sale in the $130,000 to $140, price range. Based on these facts, which of the following statements is true? - CORRECT ANSWER>>Miranda is Alan's client. Claude is a customer A real estate agent (sales affiliate) is listing the home of a married couple in Georgia. The deed to the property is in the husband's name alone. Who would need to sign this contract? - CORRECT ANSWER>>The listing agent and the husband A licensee may be found guilty of fraudulent misrepresentation in a real estate transaction in which of the following circumstances? - CORRECT ANSWER>>The licensee fails to disclose a known material fact to a third party who relies on that information. A broker has a listing for which the seller desires to net at least $30,000 from the sale of the property. The seller has agreed to pay the broker 7% commission, and the seller's loan payoff

and other closing expenses total $90,900. What is the minimum the property will need to sell for to allow the seller to net the $30,000? - CORRECT ANSWER>>$130, The type of listing contract under which the listing broker is due a commission if the property is sold by anyone, including the owner, during the time of the listing? - CORRECT ANSWER>>Exclusive right to sell listing A safety or protection clause negotiated between the listing agent and the seller in a brokerage engagement would result in - CORRECT ANSWER>>extending the broker's right to claim a commission beyond the listing's expiration date A listing agreement may give the agent authority to - CORRECT ANSWER>>collect earnest money on the seller's behalf and deposit such funds in a trust account A property sells for $85,000. The existing mortgage balance is $17,000 and seller is paying $1600 toward closing costs if the brokerage fee is 6.5%, what would be the seller's net in the transaction? - CORRECT ANSWER>>$60, What does the phrase "the law of agency is common-law doctrine" mean? - CORRECT ANSWER>>It is part of a body of laws established by tradition and court decisions Northeast Realty, Inc. lists owner Baird's home and the broker's licensee affiliate Carr tells potential buyer Dole that the property's basement is dry to the best of her knowledge. Carr also communicates to the buyer Dole that should the basement leak, seller baird would pay for the repair. In fact, Carr had never discussed such a situation with the client. Under these circumstances, what is true? - CORRECT ANSWER>>Salesperson Carr is directly liable to purchaser Dole for her actions. As a listing agent, you negotiate a sales contract on owner Grant's property. On a subsequent visit to the property, prior to the closing, you discover termite infestation in the basement storage room. You should - CORRECT ANSWER>>inform both the buyer and seller, and allow the two parties to decide an acceptable course of action. You go to the home of Bob and Barbara Baird for a listing appointment. Barbara Baird informs you that Bob is out of town on business but he has given her authority to sign his name on the listing contract. Barbara can sign the listing for herself and Bob: - CORRECT ANSWER>>only if she is acting as Bob's attorney-in-fact under a duly executed power of attorney

As you are leaving your office to present an offer to purchase for your seller client's home, you receive another offer on this listing for a lower purchase price. What should be your course of action? - CORRECT ANSWER>>Present both offers to your client, and assist the seller in deciding which one might be best. In some circumstances, a firm may represent both a seller and a buyer in the same transaction and receive a fee from both. This relationship, which must be disclosed and agreed to by both parties, is known as: - CORRECT ANSWER>>dual agency At the closing, a seller pays the broker $21,000 in commission which represents 7% of the property's sales price. What was the selling price of the property? - CORRECT ANSWER>>$300, A broker owes which of the following duties to a customer? - CORRECT ANSWER>>Honesty A licensee whose affiliation agreement with a broker indicates the agent's employment as an independent contractor would: - CORRECT ANSWER>>be responsible to the broker for the results of the work performed in acquiring clients and closing transactions The Americans with Disabilities Act (ADA) of 1990 would apply in which of the following situations? - CORRECT ANSWER>>A shopping center without wheelchair accessible restrooms Owner/occupant Howard decided to find a tenant to rent the basement apartment in his home. In the process of selecting a tenant, which of the following actions may allow Howard an exception to the Federal Fair Housing Act? - CORRECT ANSWER>>Deciding to rent only to female tenants as long as he doesn't employ the services of a real estate broker and doesn't use any discriminatory advertising A sales affiliate for ABC Realty is the primary agent for 5 of his broker's listings. Another sales affiliate for ABC Realty has a buyer/client who is interested in purchasing one of these listings. Per company policy, the first sales affiliate assumes the role as the seller/client's exclusive agent and the other sales affiliate assumes the role as the exclusive agent of the buyer. This arrangement is an example: - CORRECT ANSWER>>designated agency Which of the following real estate brokerage advertisements would be legal under antitrust laws? - CORRECT ANSWER>>List with us between now and the end of the year, and pay only 4.5% commission

Blockbusting may best be defined as - CORRECT ANSWER>>inducing "panic" selling by spreading information in a community that minority classes may be soon moving into the neighborhood Under the Can-Spam Act, federal guidelines are established for a real estate company that sends out to the public: - CORRECT ANSWER>>any solicited e-mail messages that advertise the brokerage firm's benefits Broker Baxter is asked by a purchaser to explain a budget mortgage. Baxter's best answer would be - CORRECT ANSWER>>a mortgage with payments including taxes and insurance John wants to secure financing to build a home on a parcel of land that he owns. A lender approves John for a construction loan. This type of financing might best be described as: - CORRECT ANSWER>>an interim loan to build a home that includes a take-out commitment from the borrower to secure a permanent loan after construction In qualifying a purchaser for a home loan, the lender determines that the borrower's total housing expense may not exceed 31% of the borrowers gross monthly income (front-end ratio). Additionally, the borrower's total reoccurring monthly debt may not exceed a 43% of the borrower's gross monthly income (back-end ratio). How are these two loan qualifying ratios calculated? - CORRECT ANSWER>>Front-end ratios are calculated by dividing the borrower's total monthly house payment by their gross monthly income; back-end ratios are calculated by dividing the reoccurring monthly debt, including the total house payment, by the gross monthly income In comparing FHA and VA loans, it would be accurate to say that - CORRECT ANSWER>>FHA loans are insured by HUD while VA loans are guaranteed by the VA Negative amortization will most always be a part of which of the following loan repayment methods? - CORRECT ANSWER>>Graduated payment mortgage Which of the following statements regarding FHA loans for residential property is true? - CORRECT ANSWER>>The maximum FHA loan amount for a borrower is determined by the geographical area where the property is located A straight term mortgage is characterized by - CORRECT ANSWER>>interest only payments until the end of the loan term when the principle becomes due in full

A prospective homebuyer receives a Certificate of Entitlement for $100,000 from the VA. Based on this amount, a private lender may approve the veteran for a loan with no down payment up to - CORRECT ANSWER>>$400, A property was purchased for $175,000. If the loan to buy this property was $131,250, was the loan-to-value ratio (LTV)? - CORRECT ANSWER>>75% PMI for conventional loans or MIP for FHA loans would be calculated on - CORRECT ANSWER>>the loan amount used to finance the property sale Lenders may assess prepayment penalties on FHA and VA loans under what circumstances? - CORRECT ANSWER>>Under no circumstance, as the VA and HUD do not allows this penalty A buyer purchases a home in which the seller provides owner financing with a 15 yr amortized loan. At the closing, the seller transfers title to the buyer making the buyer the property's legal owner of record while giving the seller a lien against the property. The type of financing used for this property may be best described as a: - CORRECT ANSWER>>purchase money mortgage Which of the following loan types would most likely include interest rate caps, an applicable economic index and a margin added to that index by the lender? - CORRECT ANSWER>>Adjustable rate mortgage Mary sold her property to Ron subject to her existing mortgage. If Ron defaults on the loan who is liable? - CORRECT ANSWER>>Mary only A mortgage loan that includes appliances and patio furniture may be described as which of the following? - CORRECT ANSWER>>Package loan "Buy-down" describe a financing method that makes homes more affordable for prospective buyers by reducing payments in the early years of the loan. Regarding this loan technique, which of the following is true? - CORRECT ANSWER>>Lenders are paid up front fees to lower the interest for a borrower in the first few years of the loan, however, negative amortization does not occur Which party in the lending process will review the loan package and make the final decision regarding approval or denial for the borrower? - CORRECT ANSWER>>The loan underwriter

John obtains a straight term loan for $75,000 at an 8% interest rate. When he repaid the principal sum of $75,000, he paid an additional $12,000 in interest. How long did John keep the loan? - CORRECT ANSWER>>Two years When making a loan, the lender would normally base the loan to value ratio on: - CORRECT ANSWER>>the appraised value or sales price, whichever is lower A violation of Georgia state law concerning mortgage fraud can result in - CORRECT ANSWER>>fines up to $100,000 and up to 20 years in prison Mortgage insurance would most likely be charged on - CORRECT ANSWER>>any loan with an ATV more than 80% Which of the following loans would require mortgage insurance: loan assumption, purchase money mortgage, FHA loan, VA loan - CORRECT ANSWER>>FHA loan A fully amortized loan is characterized by - CORRECT ANSWER>>level payments which cover all interest charged and reduce the principal to zero by maturity A buyer puts a down payment of $20,000 on an $80,000. The VA appraises the home at $76,000. Which of the following statements about what the veteran may do is TRUE? - CORRECT ANSWER>>He may use the VA loan to buy the home if he makes a cash downpayment of $ A business owner has title to the real estate where his business operates. The owner would like to free up the equity in the property to provide working funds to expand the business to a second location. Moreover, he wants to retain possession of the current location while continuing to operate the existing business. Which of the following might be used to help the business owner achieve this goal? - CORRECT ANSWER>>A sale and leaseback The closing date is May 12 and the property taxes have not been paid for the calendar year. If the annual tax bill is $1850, using a 365-day calendar year, what is the tax proration between the seller and buyer? - CORRECT ANSWER>>$669.04 debit to seller, credit to buyer The closing date is October 3 and the property taxes have been paid for the calendar year. If the tax bill is $2725, using a 365 day calendar year, what is the tax proration between the seller and buyer? - CORRECT ANSWER>>$664.45 credit seller, debit buyer

The seller's annual hazard insurance policy is paid every year on August 19. If the closing date for the sale of the property is June 8, and the annual premium for the policy is $800, using a 365 day calendar year, what is the insurance proration for the seller? - CORRECT ANSWER>>$155. credit to the seller The coverage for the seller's hazard insurance policy has an anniversary date of October 4, and the closing date for the sale of the property is March 23. If the annual premium for the policy is $1050, using a 365 day calendar year, what is the insurance proration for the seller? - CORRECT ANSWER>>558.08 credit to seller The sale of a rental property is due to close on June 22. If the owner of the property collects $500 in rent on the first day of each month, using the exact number of days in the month, what is the rent proration between the seller and buyer of this property? - CORRECT ANSWER>>$133.33 debit to seller; credit to buyer A tenant pays monthly rent of $625, and the rental period starts on the tenth day of each month. If the sale of the property has a closing date of October 31, what is the rent proration between the seller and buyer for the property? - CORRECT ANSWER>>$181.45 debit to seller; credit to buyer A homeowner is closing on the sale of their home on April 25. The seller's existing mortgage loan balance is $37, 540. The loan has an interest rate of 6% and the last payment was made on April 1. Using a 360 day calendar year, what is the accrued interest proration owed by the seller to the lender at closing? - CORRECT ANSWER>>$156. A seller's mortgage balance is $129,500 with an interest rate of 7.25% and the last monthly loan payment was made on September 9. If the sale of the property closes on October 2, using a 365 day calendar year, how much accrued interest will the seller owe the lender at closing? - CORRECT ANSWER>>$617. The sale of a property closes on May 15, and as part of the transaction, the purchaser assumes the seller's existing FHA loan of $125,00 at a 6% interest rate. The seller's mortgage payment is due on the first day of each month, using a 365 day calendar year, calculate the accrued interest proration? - CORRECT ANSWER>>$308.22 debit to seller (credit to buyer) When working with a prospective buyer, at what point should a real estate licensee begin the process of estimating the purchaser's financing ability to complete a sales transaction? - CORRECT ANSWER>>Prior to beginning a property search for the buyer

Using the equity in their property, a retired couple negotiated a loan with a private lender. They now receive a monthly check from the lender for their lifetime, as long as they continue to reside in the home. These senior citizens have negotiated: - CORRECT ANSWER>>a reverse annuity mortgage (RAM) As part of $400,000 land contract with a property owner, a buyer agrees to give the seller an $80,000 down payment and receive a loan from the seller for the balance. At the closing of this contract for deed, what legal interests in the property will each party receive? - CORRECT ANSWER>>The purchaser will have possession and equitable title to the property and the seller will retain legal title until the loan is paid in full Which of the following loans would most likely require private mortgage insurance? - CORRECT ANSWER>>A 90% LTV conventional loan A lender requires that a borrower's monthly payment for a home loan include principle and interest, one month of the annual property taxes, one month of the annual hazard insurance policy, a one month PMI. This "PITI" payment is typically referred to as a - CORRECT ANSWER>>budget mortgage The interest or value remaining in property after payment of all terms or other charges on the property is called - CORRECT ANSWER>>equity A contract sales price for a property is $275,000 and the home appraises for $280,000. In this circumstance, what would be true regarding the LTV for the purchaser's loan? - CORRECT ANSWER>>The LTV would be calculated on $275, Financing that includes a balloon payment for a mortgage would most commonly be found in what type of loan - CORRECT ANSWER>>Straight term loan A government backed loan that guarantees the lender substantial protection if the borrower defaults is a - CORRECT ANSWER>>VA loan Faye has worked at her company for five years and makes $60,000 a year. She is applying for a loan to purchase a home and the lender has calculated her total monthly payment will be $1500. Faye's reoccurring monthly debt obligations include a car payment for $350.00 and credit card minimums totaling $250.00. For loan approval, her lender only uses a back-end ratio and requires her total monthly debt not exceed 43%. Assuming Faye's credit profile is

satisfactory, would she qualify for the loan? - CORRECT ANSWER>>Yes, her back-end ratio falls within the lender's guidelines The maximum term of a residential VA or FHA loan is - CORRECT ANSWER>>30 years Which of the following properties would meet the requirements to obtain a VA guaranteed loan? - CORRECT ANSWER>>Owner occupied, single family dwelling To be eligible under the VA loan program, the minimum active service time during "wartime" is:

• CORRECT ANSWER>>90 days A purchase money mortgage would most likely be offered to a purchaser by which of the following? - CORRECT ANSWER>>Seller Which of the following is a characteristic of a graduated payment loan and generally not found in a traditional level payment loan? - CORRECT ANSWER>>Negative amortization In a real estate loan the principal is the: - CORRECT ANSWER>>loan amount A buyer purchases a property using financing in which they agree to assume and pay the seller's existing loan. Liability in this financing process would be as follows: - CORRECT ANSWER>>The buyer would assume primary liability to the seller's lender, but the seller would have secondary liability to the lender A certificate of eligibility would be necessary under which of the following loan programs? - CORRECT ANSWER>>VA What would be the interest rate for a $65,000 loan if quarterly interest payments totaled $1340.63? - CORRECT ANSWER>>8.25% The process of evaluating the worth of a property and the financial ability of a purchaser in order to arrive at a final decision for loan approval is known as: - CORRECT ANSWER>>underwriting The factors which control the top price a purchaser can pay for a home loan are: - CORRECT ANSWER>>Maximum down payment and maximum monthly payment

Which of the following loans would most likely include a funding fee? - CORRECT ANSWER>>A VA loan A property sold for $150,000. The buyer's mortgage required a down payment of 15% of the purchase price. The buyer must also pay a 1% loan origination fee and $1000 in closing costs. How much will the buyer owe at closing? - CORRECT ANSWER>>$24, A property is appraised by a VA qualified appraiser who will issue: - CORRECT ANSWER>>a certificate of reasonable value A veteran's remaining entitlement is $25,000. Assuming the veteran can afford the payments, the maximum VA loan generally available to the veteran with no down payment is: - CORRECT ANSWER>>$100, A buyer is getting a $155,000 loan with a 5% interest rate to purchase a home. The closing will take place on April 20. When is the first loan payment due and, using a 360 day calendar year, what will the purchaser owe in adjusted interest at closing? - CORRECT ANSWER>>The first payment will be due June 1, and the adjusted interest will be $236. A buyer is getting a $235,000 loan with a 4.75% interest rate to purchase a home. The closing date is December 7. When is the first loan payment due and, using a 360 day calendar year, how much prepaid interest will the purchaser owe at closing? - CORRECT ANSWER>>The first payment will be due February 1, and the prepaid interest will be $775. A buyer purchases a property for $315,000 with a maximum VA loan LTV. If the interest rate on this new loan is 6% and the sale closes on September 30, using a 365 day calendar year, how much prepaid interest will the buyer owe, and to whom will this adjusted interest be paid? - CORRECT ANSWER>>$51.78 paid to lender The price of a property is $250,000 and the buyer has beenn approved for a conventional loan with a 95% LTV. The annual property taxes are $3000, the annual hazard insurance premium is $850, and the PMI totals $2,208 annually. If the factor to amortize this loan for 30 years is $5. per $1000, what would be the purchaser's total monthly house payment? - CORRECT ANSWER>>$1744. A buyer purchases a home for $200,000 and secures a loan with a 90% LTV. The lender has quoted a rate of .64% annually for PMI. What would the purchaser's monthly PMI payment be?

• CORRECT ANSWER>>$96.

A purchaser is using an FHA loan to buy a $220,000 home. The LTV is 96.5% and the up-front MIP rate (UFMIP) is 1.75%. How much will the FHA loan amount be once the UFMIP is included?

• CORRECT ANSWER>>$216, Using the information from question above, if the MIP rate is .85%, what will the purchaser pay monthly for the MIP? - CORRECT ANSWER>>$153. If the sales price of a property is $258,000, and the borrower secures a conventional loan with an 80% LTV, how much intangibles tax would be assessed at a closing in Georgia? - CORRECT ANSWER>>$619. A home in Georgia sells for $310,750 and the purchaser uses a VA loan with the maximum LTV, how much is the intangibles tax? - CORRECT ANSWER>>$ If the property taxes for the calendar year are paid annually on July 1 and a property closes on January 15, a lender may require the purchaser with a budget mortgage to deposit how many months of property tax into an escrow account at closing? - CORRECT ANSWER>>10 months A home in Georgia sells for $246,700, and the buyer's new loan of $222,030 represents a 90% LTV, how much transfer tax must be paid at closing? - CORRECT ANSWER>>$246. Facts about Rental income proration - CORRECT ANSWER>>-Measured in months
• Is always a DEBIT TO SELLER
• Seller is entitled to all earnings through the day of closing
• Buyer begins earning the day after closing Facts about property tax proration - CORRECT ANSWER>>-Property taxes are always paid for the time period of Jan 1-Dec 31, regardless of when they are due.
• Must think in terms of years instead of months
• 2 most important questions in calculating property tax: 1) Have taxes been paid? 2)When are they due?
• Start Jan 1 and count through closing date. Multiply the number of days by the per diem rate. Facts about PMI proration - CORRECT ANSWER>>-Lender always charges client for closing day whether buyer or seller. BOTH ARE CHARGED CLOSING DAY.
• PMI always pays interest for previous month
• Clock starts ticking first day of month of closing and goes through closing day (for seller's debit)

Facts about Hazard insurance proration - CORRECT ANSWER>>-Homeowner has to pay one year in advance

• ALWAYS CREDIT SELLER
• Starts date insurance is due/renews
• Ends day before insurance is due
• Annual premium divided by 365 per diem= daily rate transfer tax formula - CORRECT ANSWER>>sales price-assumable loan (if any) divided by 100 (round up here) x. intangible tax formula - CORRECT ANSWER>>loan amount divided by 500 (round up here) x $1. back end debt to income ratio - CORRECT ANSWER>>mortgage plus other debts Front end of debt to income ratio - CORRECT ANSWER>>ratio of mortgage to income