Financing Exam Questions
Financing is one of the most heavily weighted exam topics at 12%, covering the entire lending process from loan types (conventional, FHA, VA, USDA) to federal regulations (RESPA, TILA, ECOA) and the secondary mortgage market. This topic requires understanding both the practical aspects of mortgage origination and the regulatory framework that governs lending practices. Key concepts include loan-to-value ratios, PMI requirements, the difference between mortgage and deed of trust states, and prohibited practices under RESPA. Math questions related to financing — such as interest calculations, LTV ratios, and amortization — appear frequently and represent some of the most concrete, scoreable items on the exam.
What You Need to Know About Financing
Financing is one of the most heavily weighted exam topics, covering the entire lending process from application to closing. This topic requires understanding different loan types, lending regulations, and financial calculations that agents encounter daily in practice.
Start by mastering the major loan types: conventional loans (conforming and jumbo), FHA loans (lower down payment, MIP required), VA loans (no down payment for eligible veterans), and USDA rural development loans. Know the key requirements for each — FHA requires 3.5% down and mortgage insurance, VA loans require a Certificate of Eligibility, and conventional loans typically need 20% down to avoid PMI.
Federal lending regulations are heavily tested: RESPA (Real Estate Settlement Procedures Act) prohibits kickbacks and unearned fees; TILA (Truth in Lending Act) requires APR disclosure and provides a right of rescission; ECOA (Equal Credit Opportunity Act) prevents discrimination in lending. Understanding the secondary mortgage market is also important — know what Fannie Mae, Freddie Mac, and Ginnie Mae do and how they keep mortgage funds flowing.
- Know the key differences: FHA (3.5% down, MIP), VA (0% down, veterans), Conventional (20% to avoid PMI)
- RESPA prohibits kickbacks; TILA requires APR disclosure; ECOA prevents lending discrimination
- Practice LTV ratio calculations: LTV = Loan Amount ÷ Appraised Value
- Understand the secondary market: Fannie Mae, Freddie Mac, Ginnie Mae roles
Sample Financing Questions
200+ in bankWest Virginia redemption period is:
A cooperative in Manhattan is converting to a condominium. How does this conversion affect existing shareholders with share loans?
The loan-to-value ratio (LTV) is calculated as:
Compliance case Cedar Docket frames the issue this way. A Florida buyer borrows $272,000 on a purchase price of $320,000. What is the loan-to-value ratio?
Which of these activities can the owner of a life estate NOT do?
Which of the following is a key benefit of a VA loan for eligible veterans?
In Delaware financing, which theory is practiced?
Audit memo Cedar Case highlights this Florida rule. The purchase price is $360,000, and the lender will lend 90% of the price. How much cash down payment must the buyer bring?
Kevin is told that his co-op purchase will require board approval even though he has financing pre-approval. Why is board approval necessary for cooperative purchases in New York?
Tennessee has which redemption period after foreclosure?
Foreclosure in Vermont is typically:
Mississippi uses which security instrument?
Which of the following is NOT required for a valid bill of sale?
Deficiency judgments in Alabama are:
Sarah Martinez is purchasing a co-op apartment in Manhattan for $750,000. Her lender explains the financing structure for cooperative units. What type of loan will Sarah receive for this co-op purchase?
Frequently Asked Questions
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How many Financing questions are on the real estate exam?
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Explore Other Topics
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