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P3-113 quiz

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Question 1 of 12

1. Question
What is a multi-width manufactured housing unit?
- A) A manufactured home created by joining two or more single-width sections or stacking them
- B) A mobile home that cannot be transported
- C) A site-built home with modular components
- D) A commercial warehouse converted to housing
Correct

Incorrect
Question 2 of 12

2. Question
What is negative amortization?
- A) A rapid reduction of the mortgage balance
- B) A payment schedule where interest is forgiven
- C) A payment plan requiring biweekly installments
- D) An increase in mortgage debt because the payment is insufficient to cover interest
Correct

Incorrect
Question 3 of 12

3. Question
What is net cash flow?
- A) Gross rental income before expenses
- B) Monthly revenue minus only principal payments
- C) Income remaining after monthly operating income is reduced by monthly housing expense
- D) Total profit after selling an investment property
Correct

Incorrect
Question 4 of 12

4. Question
What does net worth represent?
- A) Total liabilities of a borrower
- B) Assets minus liabilities, indicating financial strength
- C) Total cash flow from investments
- D) Annual taxable income
Correct

Incorrect
Question 5 of 12

5. Question
What is net yield?
- A) The portion of gross yield remaining after deducting all costs and reserves
- B) Yield before operating expenses
- C) The interest rate listed on the promissory note
- D) The gross amount of rental income divided by 12
Correct

Incorrect
Question 6 of 12

6. Question
What is a no cash-out refinance?
- A) A refinance where the borrower receives over 10% cash back
- B) A refinance used only for investment properties
- C) A refinance requiring a full home renovation
- D) A refinance where the new mortgage only covers unpaid principal, closing costs, certain liens, and up to 1% cash to borrower
Correct

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Question 7 of 12

7. Question
What is a non-traditional mortgage?
- A) Any mortgage product other than a 30-year fixed rate mortgage
- B) A mortgage issued only by private lenders
- C) Loans requiring no documentation
- D) Loans guaranteed by the government
Correct

Incorrect
Question 8 of 12

8. Question
What is a notary public?
- A) A court-appointed judge
- B) A mortgage underwriter
- C) A public officer authorized to attest and certify documents, take affidavits, and protest instruments
- D) A title insurer
Correct

Incorrect
Question 9 of 12

9. Question
What is a note in mortgage lending?
- A) A property deed showing ownership
- B) A written promise to pay a stated amount on a specific date (promissory note)
- C) A borrower’s credit report
- D) A mortgage insurance certificate
Correct

Incorrect
Question 10 of 12

10. Question
What was the role of the Office of Thrift Supervision (OTS)?
- A) To regulate credit unions
- B) To manage FHA mortgage programs
- C) To oversee private mortgage insurers
- D) To regulate the thrift (savings and loan) industry
Correct

Incorrect
Question 11 of 12

11. Question
What is an open-end mortgage?
- A) A mortgage allowing the outstanding loan amount to be increased upon mutual agreement
- B) A mortgage with no closing costs
- C) A mortgage paid off in one lump sum
- D) A temporary construction-only loan
Correct

Incorrect
Question 12 of 12

12. Question
What are operating expenses for investment property?
- A) Only mortgage insurance and property taxes
- B) Only repairs and utilities
- C) Costs of maintaining an investment property such as utilities, repairs, fees, and reserves
- D) Depreciation for tax purposes only
Correct

Incorrect

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