Real Estate Financing Quiz

<p>The mortgage lender demands immediate payment of the outstanding loan balance. (B)</p> Signup and view all the answers

<p>The seller (D)</p> Signup and view all the answers

<p>5-7% (C)</p> Signup and view all the answers

<p>With a lease option, you don't own the property but have an option to buy it, unlike a land contract. (B)</p> Signup and view all the answers

<p>As an initial offer expression. (B)</p> Signup and view all the answers

<p>FHA Loan (A)</p> Signup and view all the answers

<p>The potential profit from selling the house is very minimal, if any. (B)</p> Signup and view all the answers

<p>The ability to purchase with 0% down. (A)</p> Signup and view all the answers

<p>Conventional Loan (A)</p> Signup and view all the answers

<p>The seller will make a lot of profit from the sale. (B)</p> Signup and view all the answers

<p>A discharge form, given to veterans outlining their entitlements. (A)</p> Signup and view all the answers

<p>The seller acts as the lender, receiving principal and interest. (C)</p> Signup and view all the answers

<p>5% (D)</p> Signup and view all the answers

<p>An ideal lead for pitching seller financing. (B)</p> Signup and view all the answers

<p>They are mainly interested in a large one-time payment. (D)</p> Signup and view all the answers

<p>Offering a higher purchase price, taking over mortgage, small down payment and a balloon payment. (C)</p> Signup and view all the answers

<p>An earnest money deposit that can be refunded during the inspection period. (D)</p> Signup and view all the answers

<p>Typically 5-10 days of contract. (B)</p> Signup and view all the answers

<p>The expenses of the property are greater than the rental income. (D)</p> Signup and view all the answers

<p>When a deal that doesn't cashflow, is still a good deal. (B)</p> Signup and view all the answers

<p>0.8 (D)</p> Signup and view all the answers

<p>Single-family residences (D)</p> Signup and view all the answers

<p>To move the seller's back payments to the end of the loan. (C)</p> Signup and view all the answers

<p>Multi-family properties with more than four units are commercial. (C)</p> Signup and view all the answers

<p>High capital gains taxes on high price point properties (B)</p> Signup and view all the answers

<p>A detached building on the property that is habitable. (A)</p> Signup and view all the answers

<p>An accurate estimate from a bank. (A)</p> Signup and view all the answers

<p>The initial down payment. (B)</p> Signup and view all the answers

<p>Commercial Real Estate (C)</p> Signup and view all the answers

<p>Significant existing equity in the property despite neutral or negative monthly cash flow. (D)</p> Signup and view all the answers

<p>Minimal to no equity but a property generating a positive monthly cash flow. (C)</p> Signup and view all the answers

<p>Property value appreciation is outpaced by the rate of currency devaluation. (D)</p> Signup and view all the answers

<p>To avoid non-assignment clauses while still facilitating a sale. (A)</p> Signup and view all the answers

<p>They control interest rates, impacting the cost of borrowing money. (C)</p> Signup and view all the answers

<p>They suppress property values due to decreased borrowing affordability. (C)</p> Signup and view all the answers

<p>The sum of all costs buyers incur for purchasing a creative financing deal. (B)</p> Signup and view all the answers

<p>A down payment refers to the initial payment made to the seller, while an entry fee aggregates all acquisition expenses for the buyer. (C)</p> Signup and view all the answers

<p>$1,200 (A)</p> Signup and view all the answers

<p>$900 (A)</p> Signup and view all the answers

<p>$3,600 (B)</p> Signup and view all the answers

<p>20% (C)</p> Signup and view all the answers

<p>Interest rate (A)</p> Signup and view all the answers

<p>Net Operating Income (A)</p> Signup and view all the answers

<p>To avoid capital gains taxes (B)</p> Signup and view all the answers

<p>The profit from the transaction (B)</p> Signup and view all the answers

<h1>=</h1> <h1>=</h1> Signup and view all the answers

A type of creative financing where the buyer doesn't get the title until the end of the contract. The seller retains ownership and can sell the property at any time.

Similar to a land contract, but the buyer has the option to purchase the property at a predetermined price within a set period of time. Rental payments are applied towards the purchase price.

A government-backed loan that requires as little as 3.5% down payment. It's designed for first-time homebuyers but can be used by others depending on credit and income.

A government-backed loan specifically for veterans. These loans often require no down payment.

A common type of mortgage loan not backed by the government. These loans typically require a down payment of 5% or more.

A seller who owes a small amount on their mortgage, making them a good candidate for seller financing.

A seller who expects a substantial sum of money from the sale, making seller financing less appealing.

An earnest money deposit that can be refunded to the buyer during the inspection period.

An earnest money deposit that cannot be refunded once it is sent to the title company.

A period in a contract where the buyer can back out of the deal for any reason.

The net income from an investment, calculated as revenue minus expenses.

A situation where an investment generates a negative profit, meaning more money is going out than coming in.

An investment that doesn't generate positive cash flow but may still be profitable in the long run.

The amount paid to a seller each month in a seller finance deal, covering both principal and interest.

A clause in a mortgage agreement that allows the lender to demand the full remaining loan amount immediately if the property is sold.

The commission earned by a realtor for selling a property, typically around 6% of the sale price, covering both the buyer's and seller's agents.

A formal letter outlining the terms of an offer to purchase a property, often used in real estate transactions.

A situation where the homeowner's equity in their property is relatively low, meaning they owe close to the property's current value.

A situation where homeowners have a significant amount of equity in their property, implying a sizable profit potential upon selling.

A process of gradually paying off a loan over time, typically through regular installment payments.

A loan agreement where the borrower makes regular payments over a longer period, typically 30 years, to gradually reduce the loan amount.

Focusing on generating consistent rental income from a property, usually with less upfront equity but a lower risk of losing money.

An area where real estate value growth is slower than the rate of inflation, making it a good market for cashflow but not necessarily for appreciation.

A technique used to avoid restrictions on property assignments or wholesaling by temporarily owning a property using lender funds, then reselling it for profit.

The organization responsible for regulating the U.S. economy, influencing real estate by controlling interest rates. When rates rise, the cost of borrowing increases, potentially affecting real estate.

The total amount of money required to acquire a property, including down payment, closing costs, and any additional fees.

A payment made to the seller of a property when purchasing it using creative financing. It's similar to a traditional down payment but can be less due to the use of alternative financing methods.

The profit or gain earned from selling a property.

A measure of how much profit is generated from an investment, usually calculated as the annual net income divided by the initial investment.

A way to measure the profitability of a real estate investment by calculating the net operating income (NOI) as a percentage of the property's value.

The total revenue generated by a property before deducting operating expenses.

The yearly income generated from a property after deducting operating expenses. It's a key metric for measuring investment performance.

The total amount of income generated by a property before deducting expenses. It's often understood as the gross rent.

A way to express the overall profitability of a real estate investment.

A type of financing where the buyer makes monthly payments to the seller, who retains ownership of the property until the loan is fully repaid.

Single-family homes, the most common type of property in real estate transactions, represent 90% of dealings.

A professional assessment of a property's worth by a licensed appraiser. It determines how much a bank is willing to lend based on standardized methods, different from online estimators.

A negotiation with a bank to adjust the loan terms for a property. This can include deferring back payments, potentially with a higher interest rate, to make the deal more attractive to the buyer.

Real estate for multiple families, including duplexes, triplexes, and larger units. Properties with over 4 units are considered commercial rather than residential.

Real estate intended for business purposes, often including storefronts, warehouses, and storage units. Multi-family properties with more than 4 units are also considered commercial.

An additional living unit added to a property, often an attached or detached garage converted into livable space. ADUs increase a property's value and rental potential.

A situation where the buyer doesn't immediately receive full ownership of the property. The seller maintains ownership until the buyer completes payments, giving the seller flexibility to sell the property at any time.