CA Real Estate Finance Course » 2021 » Sec 7 Unit 4 Exam

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Question #1
Beth needs help with the down payment to buy Mark’s property. Mark is going to supplement Beth’s bank loan with a second loan, allowing her to meet her lender’s down payment requirements. What finance instruments may be used for this agreement?
A.   A contract for deed or market
B.   A contract for deed or mortgage
C.   A contract for deed or deed of trust
D.   Mortgage or deed of trust
Question #2
How does a 3-2-1 buydown work?
A.   The rate is reduced by 1% for the first three years, by 2% for the next two years, and by 1% for one more year, and is then set at the rate stated in the note for the rest of the loan term.
B.   The interest rate increases by 3% the first year, 2% the second year, and 1% the third year until it reaches the original rate stated in the note.
C.   The interest rate starts at 3% for the first year, changes to 2% the second year, changes to 1% the third year, and is then set at the rate stated in the note for the rest of the loan term.
D.   The interest rate starts low but increases by 1% each year for three years until it reaches the rate stated in the note.
Question #3
Bob is selling a four-bedroom house that he bought as an investment property. Victoria would like to buy it, but she has a low credit rating and can’t find a bank that will offer her a loan. After reviewing Victoria’s financial situation, Bob feels confident that she’s an acceptable risk. He offers to extend her a line of credit for the purchase in the form of a contract for deed. What issue should Bob be aware of?
A.   Victoria could use the property as collateral for another loan.
B.   Victoria could cause an involuntary lien to be placed on the property.
C.   Victoria could sue Bob for possession of the property and win ownership without paying the full price they agreed upon.
D.   Victoria could sell Bob's interest in the property.
Question #4
Your clients, the Nguyens, have signed a contract for deed to purchase a property. What rights do the Nguyens receive?
A.   Equitable and legal title and right of possession
B.   Equitable and legal title
C.   Equitable and justifiable title
D.   Equitable title and possession of the property

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