CA Real Estate Principles Course » 2021 » Section 14 Unit 6 Exam

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Question #1
Some first-time homebuyers tap into the bank of mom and dad. In what circumstance would the parents' contribution be acceptable for loan qualification?
A.   The borrower receives cash at closing.
B.   Interest rates for the loan must not exceed 3%.
C.   The money is given as a gift with no expectation of repayment.
D.   A balloon payment must not apply for the first three years.
Question #2
The three companies that track credit for lenders are TransUnion, Equifax, and Experian. Which of the following is a true statement?
A.   The higher the score, the higher the credit risk
B.   Each company a uses a slightly different scoring system
C.   Scoring is consistent across the three companies
D.   Each company posts the borrower's FICO® Score
Question #3
This letter is created after a borrower submits information about their income and debts, which is verified by the lender, who then estimates how much a borrower qualifies for.
A.   Pre-qualification letter
B.   Pre-approval letter
C.   Approval letter
D.   Disclosure letter
Question #4
A borrower is using a gift to fund part of his home purchase. What criteria for the gift holds the most weight in the lender’s eyes?
A.   The amount of the gift
B.   How long ago the gift was given
C.   The terms for repayment
D.   How the gift giver is related
Question #5
Consumers may use Roth IRA funds to obtain the down payment for their home purchase. Which of the following scenarios is allowed?
A.   Nevil, who has held his Roth IRA for five years, borrows $10,000 for his down payment.
B.   Desiree, who has held her Roth IRA for three years, borrows $7,000 for her down payment.
C.   Clayton, who has had his IRA for 10 years, borrows $15,000 from it for his home purchase.
D.   Mary borrows $5,000 from Jack's Roth IRA for her home purchase.
Question #6
Your clients are first-time home buyers. They can access up to _________ of their Roth IRA accounts, penalty free, for their down payment.
A.   $0
B.   $20,000
C.   $5,000
D.   $10,000
Question #7
Which organization establishes relationships with financial institutions to offer home ownership programs that include down payment assistance through grants and favorable terms?
A.   RESPA
B.   HUD
C.   OSHA
D.   NHF
Question #8
Most lenders like to see at least _______ months of cash reserves in addition to the buyers' down payment.
A.   Four
B.   Eight
C.   Two
D.   12

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