Aceable Agent – Finance Practice Test

These questions are part of the practice quiz. Start practicing

• Which term describes an agency created by law after the existence of an ostensible agency?
• Which instrument is used to adjust mortgage priority between lenders when refinancing a property with existing encumbrances?
• In a lien theory state, what does the lender hold?
• The 1993 amendment to the Texas Real Estate License Act replaced common-law dual agency with what framework?
• What term describes a type of security interest that affects the title to the property?
• What marks the start date of a listing agreement?
• Which option is NOT an exception to providing a written IABS notice?
• What is a deed of trust and the role of the trustee?
• Which term describes approval after the fact of an agent's actions taken without prior authority?
• Under RESPA, which practice is prohibited to protect borrowers?
• What are lender points and when might a borrower choose to pay them?
• What is a lien?
• The Housing Expense Ratio is not applicable to VA loans.
• What is the right to redeem property before the foreclosure sale called?
• Which authority arises when an agent takes actions that are customary for the profession to represent the agent's interests?
• Which document represents the borrower's promise to repay the loan?
• What does the appraiser focus on when doing a Sales Comparison Approach?
• Which Texas agency is most closely associated with housing and community development, including energy assistance for rural communities?
• Which arrangement involves a seller extending a mortgage to the buyer while continuing to pay the original loan and receiving payments from the buyer?
• Which type of listing agreement gives the broker exclusive rights to sell and guarantees a commission?
• Which contract for real property involves the seller relinquishing possession but keeping title until the full price is paid?
• What is the difference between a lender credit and a seller concession as closing-cost assistance?
• Which agency form limits an agent's powers to acts permitted by the principal?
• Which statement about title policies is false?
• Under TRELA, when is an IABS notice required to be given?
• Which instrument is used to establish the priority of mortgages on a property when there are multiple loans?
• Which term describes a state where the lender holds legal title to the mortgaged property until the mortgagor satisfies the loan terms?
• What is a rate lock and why is it important for buyers?
• Who inspects land titles to ensure there are no liens and that the seller owns the property?
• What distinguishes conventional conforming loans from jumbo loans?
• Which commission was created to enforce TRELA and also regulates educational and licensing programs that maintain standards, while interpreting legislation affecting the real estate profession?
• Which statement about lien priority is accurate?
• Is TAR's Sales Disclosure Notice (SDN) required to be attached to the sales contract?
• Which term refers to changing the terms of a loan?
• What must a Closing Disclosure include and when must it be provided?
• What is the name and year of the first legislation created to govern the real estate profession in Texas?
• In the DUST framework, which component is a DUST component?
• How long does the broker have to send a notice listing houses they showed to meet the Protection Period requirements?
• Which of the following is NOT a term used to describe the framework allowing dual representation with appointed intermediaries in Texas real estate?
• Which department addresses housing and community development issues such as economic development, infrastructure for rural communities, and energy assistance?
• What term describes a situation where a third party's belief about an agent's authority arises from the principal's conduct, regardless of actual authority?
• When should an IABS notice be given?
• The ratio of the total cost of financing to the loan amount is represented by which rate?
• What is important for the broker to have their prospective buyer obtain from a lender before the enter representation?
• What should you enter on Paragraph 15 in the Listing Agreement for Special Provisions?
• Does the Consumer Financial Protection Bureau promote affordable housing opportunities?
• Gross Rent Multiplier (GRM) is used in financing analysis as a quick metric.
• What is the difference between a lender's title policy and an owner's title policy?
• Which clause would specify that the lender's recourse is limited to the property securing the loan?
• What term describes a situation where a principal allows a license holder to act in a way that leads a third party to believe the license holder is the principal's agent?
• Which Act promotes the informed use of consumer credit?
• Which form of authority is present when an agent's actions fall within or beyond the express or implied authority granted by the principal?
• Which statement best describes the purpose of RESPA?
• Which of the following is the accurate expansion of the acronym TDHCA?
• Which statement is true regarding who pays the commission and which party the agent represents?
• In seller financing, what is a key risk related to due-on-sale?
• In a title theory state, who holds title to the property while the loan is outstanding?
• A lender that has the approval from FHA to approve without requesting first is called?
• A broker who represents two parties at the same time, acts according to common law obligations and duties, and cannot act against the interest of either party.
• Which notice explains appointers in intermediary arrangement?
• IABS should be given to the buyer at what point?
• HUD is the acronym for which U.S. department?
• What is SOFR and why is it replacing LIBOR for many mortgage loans?
• Which clause relieves the borrower of personal liability to repay the loan?
• Which statement about title insurance is true?
• What is the typical foreclosure timeline and stages a borrower may face?
• Which of the following is a component of the DUST framework?
• Who does the Texas Real Estate Commission regulate?
• What does DUST stand for?
• Escrow shortages: which statement is accurate?
• Non-fiduciary duties are best described as which of the following?
• A balloon payment mortgage is characterized by which feature?
• In a principal-agent relationship, who bears responsibility for the agent's acts when the agent is acting within scope?
• What is the escrow cushion, and why might lenders require it?
• Which statement best describes RESPA's purpose?
• Which Act would you consult for disclosures in consumer credit?
• Which term describes the monthly servicing fee based on the loan's outstanding balance and the participant's share of expenses?
• What does a loan estimate disclose and when is it provided?
• What term refers to a contract that has not yet been fully performed?
• Which statement about the margin in ARM loans is true?
• In an intermediary arrangement, the broker represents two parties at the same time and must designate two individuals who appoint the broker. What are these individuals called?
• What is the purpose of a title search prior to closing?
• Which statement about deed of trust foreclosures is true?
• In a loan participation agreement, what does a lender typically sell?
• License holders must advise buyers to obtain what type of policy?
• Which statement is true about customers and third parties?
• Which statement about a deed of trust is correct?
• When should a Sales Disclosure Notice (SDN) be filled out?
• Which government-backed loan program requires no down payment for qualified veterans and has no PMI?
• Which entity enforces TRELA and interprets legislation affecting the real estate profession?
• Which loan type gives the buyer the title to the property but lets the seller's financing remain in place?
• How does a 30-year fixed mortgage amortize over time in terms of principal vs interest?
• Which statement about prequalification and preapproval is correct?
• Which components are included in PITI?
• If a property is stigmatized because of an event affecting perceived value, what term describes it?
• In which agency relationship are agents limited to acts permitted by the principal?
• Which appraisal method is used for residential properties and vacant land?
• The Federal Home Loan Bank System is best described as what?
• Interest rates are influenced by which three actions or factors of the Federal Reserve System?
• Which term describes a broker who represents both sides in a transaction under intermediary rules?
• Which of the following best describes the items you should discuss before signing a listing agreement with the seller?
• In which state does the mortgage lender have a lien on the property and the borrower has title?
• How do adjustable-rate mortgage (ARM) interest rate adjustments work?
• With an FHA Adjustable Rate Mortgage, can a borrower switch to a fixed-rate loan without refinancing?
• Define rate cap and how it protects a borrower on an ARM.
• Why might lenders require an escrow cushion?
• Which of the following types of deaths on a property do not have to be disclosed when selling a home?
• APR stands for which term?
• What is the consequence of entering anything other than 'Nothing' in Paragraph 15 for Special Provisions?
• The Truth in Lending Act is designed to promote what?
• Which agency concept involves a license holder's personal interest in a transaction, either for themselves, a family member, or a business interest?
• What is true about the CFPB's role in affordable housing opportunities?
• Which term describes authority granted to an agent by the principal, whether spoken or written?
• What are the three common appraisal approaches used to estimate market value?
• What is an amortization schedule?
• Which agency form makes the principal responsible for the acts of their agent as long as the agent acts within the scope of duties?
• Which department looks after housing and community development issues such as economic development, infrastructure for rural communities, and energy assistance?
• Which statement is true about FHA loans?
• If a foreclosure sale is purchased by a third party, does the buyer bear the original debt?
• If a foreclosure sale occurs and the borrower is still liable for the remaining debt, this is called a ...
• Which document defines the buyer's relationship with the broker?
• Which term describes delaying foreclosure or loan enforcement?
• When a principal allows a license holder to act in such a way that allows the third party to believe that the license holder is the principal's agent.
• A 401K, Retirement, and IRA accounts can be used as credit for income for seniors to qualify for a loan.
• Which acronym lists the six fiduciary duties of a real estate agent?
• What term describes actions taken by an agent that are within the authority granted by the principal, whether express or implied?
• What is the difference between discount points and origination points?
• Which items are typically included in closing costs?
• What does RESPA stand for in real estate finance?
• What notice should be given to the seller and buyer to provide whom the appointers are in the Intermediary agency?
• When a principal allows a licensed agent to act in a way where a third party believes that the license holder is the principal's agent.
• What is the term for a form of agency where the agent is given power to act for the principal in a broad range of matters?
• What is the term for refraining from exercising a legal right?
• Which clause prohibits the lender from seizing any property outside of the property that the loan was secured with?
• Which easement is created by open, notorious, hostile, and continuous usage?
• What does the sales comparison approach rely on to estimate market value?
• Which redemption is not allowed in Texas?
• Which easement is a personal right to use the land of another?
• What are typical front-end and back-end DTI guidelines for conventional loans?
• APR represents what, and how does it differ from the note rate?
• What is the conforming loan limit?
• PMI is required for conventional loans when LTV exceeds what percentage?
• Which statement about points is correct?
• What is an impound account and how does it relate to escrow?
• Is PMI required for a conventional loan with less than 20% down?
• True or False: If a lender forgives a debt after foreclosure, the borrower may owe taxes on the forgiven amount.
• Which funding mechanism is used for the FHA program?
• What is seller financing and how does it affect the loan?
• Which notice must be given at the first substantive conversation about a property?
• Ostensible agency involves which scenario?
• When a principal gives an agent authority to act on their behalf by mutual consent, either in writing or orally, this is known as what?
• In which mortgage theory does the borrower hold title and the lender has a lien?
• Since 2005, dual representation is only possible through Intermediary process, instead of Dual Agency.
• Which option is not listed as a responsibility of the department that handles housing and community development issues such as economic development, infrastructure for rural communities, and energy assistance?
• Discount points are prepaid interest paid at closing to lower the loan's interest rate; paying them affects monthly payments and APR.
• In appraisal for investment property, which approach is used to estimate value based on expected income?
• Which statement accurately describes foreclosure differences between a mortgage and a deed of trust?
• How do points and other closing costs affect the effective yield and APR of a loan?
• Short sale financing interaction: what is true?
• A suspension of loan payments for a period of time.
• Which arrangement involves the seller financing the buyer's purchase while the original loan remains in place?
• Which department would you contact to address housing and energy assistance in rural areas?
• Which program offers no down payment in rural/eligible areas and is guaranteed by the government?
• Which agency type grants very broad power of attorney to the agent?
• Which duty is not part of the OLDCAR acronym?
• Which type of easement is created by a written agreement between landowners granting or reserving an easement?
• Amount of monthly income remaining after debts are deducted.
• PMI is typically required for conventional loans with down payment below what percentage?
• Which easement runs with the land and benefits adjacent land?
• Sales Comparison Approach is used for what properties?
• What does IABS stand for in Texas real estate?
• A property on which an event has occurred that affects the perceived value is known as what?
• Which document is issued first under TRID and provides an estimated closing cost?
• What is escrow in mortgage lending and what items are typically escrowed?
• Mortgage Insurance Premium (MIP) is required for which loan program?
• LTV is defined as the ratio of the loan amount to the appraised value or purchase price, whichever is lower.
• In foreclosure, which lien is paid first?
• Will property inspection information be on the Loan Estimate form?
• Which system supports residential mortgage lending and related community investment through its member financial institutions?
• Which agency arises when a license holder acts on behalf of a principal without prior authorization and the principal ratifies the action after the fact?
• Actions an agent has been authorized (orally or in writing) to complete on behalf of a principal.
• Which agency type grants the agent general power of attorney?
• Which easement is created by a personal right to use the land of another?
• In mortgage escrow, which item is typically included?
• Which clause states that if a lender still has a deficit after seizing the secured property, then they have the right to seize other assets of the buyers?
• What determines payment order for liens in foreclosure?
• In a residential purchase agreement, what is the purpose of a financing contingency?
• Statutory redemption rights generally apply after which event?
• Which statement about jumbo guidelines is accurate?
• Which statement best describes seller concessions?
• What should you advise your buyer client to get pre-approved for before looking at homes?
• In terms of payment stability, which statement is true about fixed-rate versus adjustable-rate mortgages?
• MIP is an acronym for what?
• TRID introduced which two main disclosure documents?
• Which term describes an easement created by a written agreement between landowners granting or reserving an easement?
• True or False: Payment of compensation does not create an agency.
• What is the process of refinancing an FHA mortgage to get a better rate without requiring much documentation?
• Which statement about LTV and loan qualification is true?
• When a third party purchases at foreclosure auction, are they encumbered by the debt?
• What is the redemption period in foreclosure and what does it allow?
• How is the Lifetime cap determined on an adjustable-rate loan?
• What does the term 'estimated cash to close' mean?
• Which instrument involves transferring property to a trustee with power of sale, securing the loan?
• What are the two exceptions to the requirement to provide a written IABS notice?
• What is the agreement that is a legal document that represents the relationship between a buyer and broker?
• In a short sale, which statement is most accurate regarding lender involvement?
• Who signs the listing to start the contract?
• How does property type affect loan terms?
• Who does the subagent work for?
• Which Act is associated with standardized disclosures for consumer credit transactions?
• Which group is regulated by the Texas Real Estate Commission?
• Which Act promotes the informed use of consumer credit?
• Which legal instrument is used to resolve situations with two mortgages on a home when refinancing the first mortgage is pursued?
• The 1996 amendment (Bill 489) introduced intermediary agency as an option.
• The FHA 203(b) program insures fixed-rate loans for which type of property?
• Borrower grants and conveys to Trustee in trust, with power of sale, or the trustor is conveying the property to the trustee.
• Which of the following is NOT a DUST component?
• License holders must advise buyers to have what done by an attorney?
• Does the property fulfill a need, does it have use?
• What are agents called that represent the seller and the buyer in an Intermediary agency?
• Which agency is created by law when ostensible agency is determined, to hold the agent or principal legally accountable for actions performed on the principal's behalf?
• What term is used for the interest rate the Federal Reserve charges banks?
• Which statement about rate caps on ARMs is true?
• Which department is responsible for federal housing programs and urban development?
• TDHCA stands for which of the following?
• What is a due-on-sale clause and how does it affect loan assumption?
• Which FHA process allows refinancing with limited documentation?
• Which type of listing agreement gives the broker exclusive rights except for the seller being allowed to sell to a named prospect?
• Which term describes a mortgage concept where the lender holds the title to the property until obligations are satisfied?
• Which statement best describes the pre-listing discussions you should have with the seller?
• Which acronym represents the Texas department handling housing and community development?
• Is a conventional loan insured and guaranteed by the government?
• What is the role of a mortgage broker versus a direct lender?
• Which instrument pledges the property as collateral to secure a mortgage loan?
• Which term describes a fact that could influence a buyer or seller to change their decision if known?
• What notice should be given to the buyer before acquisition if an agent uses a buyer representation agreement that does not include the verbiage informing your client to have an attorney review the abstract of title or to obtain a title policy?