All of the following involve a seller or owner providing some form of financing to the buyer or occupant EXCEPT
Correct Answer
C) FHA 203(k) loan
In seller financing the owner carries all or part of the price; in a wraparound the seller carries a new note that includes the existing loan the seller keeps paying; and in a lease option the owner lets the occupant lease now with the right to buy later, often with rent credited toward the price. In each one the owner supplies the credit or the occupancy right. An FHA 203(k) loan is institutional financing: an approved lender advances purchase and rehabilitation money on a loan insured by the FHA, with no seller participation.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Financing Question
Background Knowledge for Financing
Real World Application in Financing
Common Mistakes to Avoid on Financing Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
More Financing Questions
Under Florida real estate law, a licensee who arranges financing must disclose all of the following to the borrower EXCEPT:
A Wisconsin mortgage broker is explaining Wisconsin's Marital Property Act to a first-time homebuyer couple. He makes several statements about how the Act affects real estate transactions. Which of the following statements is NOT correct under Wisconsin's Marital Property Act (Chapter 766)?
Under Florida's lien theory, what is the legal effect of recording a mortgage in the public records?
A buyer wants to purchase a home but cannot qualify for a conventional loan. The seller agrees to carry the entire purchase price as a note, with the buyer making payments directly to the seller over 15 years. Title transfers at closing. What type of creative financing is this?
A New Jersey lender is considering including a power-of-sale clause in a residential mortgage document, believing it will allow the lender to foreclose without going to court if the borrower defaults. Which of the following statements BEST describes the legal effect of such a clause in New Jersey?
- → Deficiency judgments in Hawaii are:
- → During the annual escrow analysis on Priya's loan, the servicer wants to maintain an escrow cushion equal to three months of projected tax and insurance disbursements. Under RESPA, what is the maximum cushion the servicer may generally maintain?
- → In North Carolina, the foreclosure sale must be held:
- → On an Illinois mortgage-closing worksheet, how are discount points typically calculated?
- → Before the scheduled foreclosure sale, Lena Howard pays the past-due installments, late fees, and allowed expenses so the loan becomes current again. What has Lena Howard done?
- → Lena Chen is buying a home for $350,000 and is making a 20% down payment. Her lender will charge 2 discount points on the loan amount. How much will Lena pay for the points at closing?
- → Which of the following is a key benefit of a VA loan for eligible veterans?
- → A California borrower has a deed of trust for $240,000 at 5% annual interest. What is the total annual interest payment?
- → The loan-to-value ratio (LTV) is calculated as:
- → James and Linda are married and jointly own their primary residence in Brookline, Massachusetts. James files a Declaration of Homestead in his name only at the Norfolk County Registry of Deeds. Later, James passes away. Under MGL Chapter 188, which of the following best describes the homestead protection status of the surviving spouse Linda?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Related Articles
How to Review Financing Questions by Splitting Qualification, Cost, and Security Into Different Buckets
A topic that feels clear in notes can still fail in practice if recall has not caught up with recognition. If you are searching for review financing...
How to Review Financing Questions Without Letting Loan Purpose, Security, and Borrower Qualification Blend Together
A topic that feels clear in notes can still fail in practice if recall has not caught up with recognition. If you are searching for review financing...
How to Review Financing Questions Without Mixing Loan Structure With Closing-Cost Logic
A topic that feels clear in notes can still fail in practice if recall has not caught up with recognition. If you are searching for review financing...