RESIDENTIAL MORTGAGES EXAM
QUESTIONS & ANSWERS
A home was purchased with a down payment of $50,000 and a loan of $200,000 at 6%
interest for 20 years. Monthly payments are $1,432.86. What is the loan-to-value ratio? -
Correct Answers -80%
$50,000 down payment + $200,000 loan = $250,000 purchase price; $200,000 divided
by $250,000 = .80
In title theory states, the mortgage clause that provides that the conveyance of the title
to the lender is defeated when all terms of the agreement have been fulfilled is the -
Correct Answers -defeasance clause.
When a property is sold "subject to the mortgage", the - Correct Answers -buyer is not
responsible for the note.
The person who borrows money to help pay for the purchase of real property is called at
various times the - Correct Answers -mortgagor.
In a mortgage transaction in Florida, the legal evidence of the personal debt is the -
Correct Answers -note.
If a mortgagee does NOT want the mortgage to be paid ahead of schedule, the
mortgage will normally contain - Correct Answers -a prepayment penalty clause
A type of seller financing in which the vendor holds legal title to the property until the
buyer has repaid the debt is a - Correct Answers -contract for deed.
A buyer agrees to purchase a property with an existing mortgage lien. In which situation
is the new buyer the only party responsible for the debt? - Correct Answers -Novation
A novation agreement makes the buyer solely responsible for any default on the
mortgage loan.
A borrower who is in default on a mortgage is allowed to prevent the lender from
foreclosing on the property by paying the mortgagee the delinquent principal and
interest, plus any expenses the mortgagee has incurred in attempting to collect the
payments. This right is called - Correct Answers -the equity of redemption.
