P3-95 Quiz

1. Question

Which of the following best describes CLOSING COSTS?

A) The down payment made by the buyer at settlement.
B) Only the lender’s origination fee on a new loan.
C) Expenses incidental to a real estate sale, such as loan, title, and appraisal fees.
D) The seller’s net proceeds after the transaction.

2. Question

What is the CLOSING DATE in a real estate contract?

A) The contractually agreed date for transferring title.
B) The date the purchase agreement is first signed.
C) The date the lender issues final loan approval.
D) The date the appraisal report is completed.

3. Question

What is the purpose of a CLOSING STATEMENT?

A) To record the listing terms between seller and broker.
B) To set the property’s assessed tax value.
C) To request payoff figures from the seller’s lender.
D) To provide a detailed account of all funds received and paid at closing, including escrow deposits.

4. Question

What is a CLOUD ON TITLE?

A) A temporary suspension of property taxes.
B) A condition revealed by title search that adversely affects title and often requires a quitclaim, release, or court action to remove.
C) A weather-related hazard disclosure on the property.
D) A standard easement for utilities.

5. Question

Which statement best describes a CO-BORROWER (CO-MORTGAGOR)?

A) A person who guarantees the loan but has no ownership interest.
B) A non-occupant co-signer with no repayment responsibility.
C) A party equally responsible for repayment who also has an interest in the property’s title.
D) A spouse whose income is not used to qualify.

6. Question

What is CO-INSURANCE in an insurance policy?

A) Sharing the risk of a policy by more than one insurer, each liable for a portion of the loss.
B) Requiring the borrower to pay two deductibles.
C) Insurance that covers both real and personal property.
D) A reinsurance treaty between two carriers.

7. Question

In a mortgage transaction, what is COLLATERAL?

A) The borrower’s credit history.
B) The lender’s funds used to make the loan.
C) The commission paid to the real estate broker.
D) Property pledged as security for a debt, such as real estate securing a mortgage.

8. Question

Which functions are typically performed by a COMMERCIAL BANK?

A) Selling only long-term insurance products.
B) Making loans, maintaining checking accounts, receiving time deposits, and discounting negotiable instruments.
C) Regulating other financial institutions.
D) Appraising real estate for mortgage underwriting.

9. Question

What is a COMMERCIAL LOAN in real estate finance?

A) A mortgage loan on property that produces income.
B) Any loan made to an individual for personal use.
C) A home equity line of credit.
D) A construction loan on a single-family residence only.

10. Question

Which statement best defines COMMERCIAL PROPERTY?

A) Property used exclusively for agricultural purposes.
B) Owner-occupied single-family residences.
C) Only large regional shopping centers.
D) Income property, typically zoned for business use, including property held for rental to one or more tenants.

11. Question

In a condominium or co‑operative project, what is COMMERCIAL SPACE?

A) Storage space reserved for unit owners only.
B) Space used to produce income through leases for commercial or business use.
C) Common hallways and lobbies shared by all residents.
D) Recreational amenities such as pools and gyms.

12. Question

What is a COMMISSION in a real estate transaction?

A) The fee charged by the lender to underwrite the loan.
B) The annual property tax due on the home.
C) The amount paid to a broker for services rendered, usually a percentage of the sale price.
D) The buyer’s earnest money deposit.

13. Question

In mortgage lending, what is a COMMITMENT?

A) An agreement between lender and borrower to lend money at a future date subject to stated conditions.
B) A notice that a loan application has been denied.
C) A document transferring title from seller to buyer.
D) A request for verification of deposit.

14. Question

What is a COMMITMENT FEE?

A) A penalty for early payoff of the loan.
B) The fee paid to record the mortgage in public records.
C) The broker’s fee for originating the loan.
D) A fee paid to a potential lender for the promise to lend money at a specified time in the future.

15. Question

In a condominium or PUD project, what are COMMON AREA ASSESSMENTS?

A) Individual property tax bills for each unit.
B) Levies against unit owners to provide capital for association expenses and upkeep of the common areas.
C) Optional contributions to a neighborhood improvement fund.
D) Charges paid only by commercial tenants in the project.

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