What are the Exam Cheat Sheets?

Exam Cheat Sheets are quick reference guides covering math formulas, key terms, important deadlines, and fair housing laws commonly tested on real estate exams.

What topics do the cheat sheets cover?

Sheets cover math formulas, real estate terms, fair housing protected classes, and important time deadlines like contract contingencies.

Can I use cheat sheets during the exam?

No, exams are closed-book. Use cheat sheets while studying to memorize key information before your test date.

How should I study with cheat sheets?

Review sheets daily in the weeks before your exam. Quiz yourself on formulas and definitions. Focus extra time on areas you find difficult.

Cheat Sheet

Financing & Lending

Loan types, key ratios, discount points, federal lending laws, and mortgage instruments. Master these financing concepts to pass the real estate exam.

Exam Tips

Know the differences between FHA, VA, USDA, and Conventional loans
TRID timing rules are heavily tested: 3 days for Loan Estimate, 3 days for Closing Disclosure
Right of rescission applies to refinances only, NOT purchase loans
Remember: promissory note = debt, mortgage/deed of trust = security (lien)

1Loan Types

Conventional

Not government-backed
620+ credit score typically required
3-20% down payment
PMI required if down payment < 20%
Fixed or adjustable rate available

FHA (Federal Housing Administration)

Government-insured (FHA)
580+ credit score for 3.5% down payment
500+ credit score requires 10% down payment
MIP required (upfront + annual mortgage insurance premium)
Maximum loan limits per county

VA (Veterans Affairs)

For veterans and active-duty military
0% down payment
No PMI required
Funding fee required
Certificate of Eligibility (COE) needed

USDA (U.S. Department of Agriculture)

For rural areas only
0% down payment
Income limits apply
Guarantee fee required
Property must be in eligible area

Jumbo

Exceeds conforming loan limits ($766,550 in 2024)
Stricter underwriting requirements
Higher interest rates
10-20% down payment typical
Higher credit score and reserves required

2Key Ratios

LTV (Loan-to-Value)

Formula: Loan Amount / Property Value x 100
Above 80% LTV = PMI required
Lower LTV = less risk for lender
Example: $240,000 / $300,000 = 80% LTV

DTI (Debt-to-Income)

Formula: Total Monthly Debts / Gross Monthly Income x 100
Front-end ratio (housing only): max 28%
Back-end ratio (all debts): max 36-43%
Lower DTI = stronger borrower qualification

PMI (Private Mortgage Insurance)

Required when LTV > 80%
Costs 0.5-1% of loan amount annually
Can be removed at 80% LTV (borrower request)
Automatic termination at 78% LTV

3Points & Buydowns

Discount Points

1 point = 1% of loan amount
Paid at closing to reduce interest rate
Each point typically reduces rate by 0.25%
Tax-deductible in year paid
Example: 2 points on $200,000 loan = $4,000

Origination Points

Fee charged by lender for processing the loan
Usually 0.5-1% of loan amount
Negotiable between borrower and lender

Buydowns

Temporary: 2-1 buydown = 2% lower year 1, 1% lower year 2, full rate year 3
Permanent: pay points to lower rate for full term
Seller or builder may pay for buydowns as concession

4TRID / TILA / RESPA (Federal Lending Laws)

TILA (Truth in Lending Act)

Requires APR disclosure to borrowers
Right of rescission: 3 business days for refinances (NOT purchases)
Implemented by Regulation Z
Applies to consumer loans

RESPA (Real Estate Settlement Procedures Act)

Prohibits kickbacks and referral fees
Requires Closing Disclosure
Limits escrow deposits
Applies to federally related mortgage loans

TRID (TILA-RESPA Integrated Disclosure)

Loan Estimate: must be provided within 3 business days of application
Closing Disclosure: must be received at least 3 business days before closing
Replaced the Good Faith Estimate (GFE) and HUD-1 Settlement Statement

ECOA (Equal Credit Opportunity Act)

Prohibits credit discrimination
Protected: race, color, religion, national origin, sex, marital status, age, public assistance
Implemented by Regulation B