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CHAMPIONS REAL ESTATE
FINANCE 2025 QUESTIONS AND
ANSWERS .
- Loan-to-Value Ratio (LTV) - correct answer - The percentage of the
lesser of the appraised value or sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the lender
will loan up to 80% of the sales price or appraised value, whichever is lower.
- Package Mortgage - correct answer - Includes both real and personal
property ( fixtures and furnishings)
- Blanket Mortgage - correct answer - Covers more than one piece of
property.
- Wraparound Mortgage - correct answer - Method of financing which
preserves the low, existing interest rate on the original note.
- Open-End Mortgage - correct answer - Permits additional borrowing on
the same note. This is sometimes called a credit card mortgage or a home equity line of credit - HELOC. 1 / 4
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- Budget Mortgage - correct answer - The monthly house payment
includes principal, interest, taxes and insurance (known as PITI)
- Collateral -Dependent Loans - correct answer - A hard money loan is a
specific type of asset-based financing in which a borrower receives funds secured by the value of a parcel of real estate.
- Character - correct answer - Is a measure of the willingness of a
borrower to make on-time payments. Credit character is revealed in the borrower's credit report.
- Capacity - correct answer - Is a measure of the borrower's ability to
repay the debt, and is demonstrated through current earnings and job stability.
- Capital - correct answer - Is the sum of all assets that the borrower
has accumulated.
- Collateral - correct answer - Is something of value that can be
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pledged as security for repayment.
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- Yield - correct answer - Is the return that the investor recieves over
the life of the loan. (Also known as profit)
- Originator - correct answer - The process of creating a new mortgage
loan, including all steps taken by a lender to attract and qualify a borrower.
- Mortgage Broker - correct answer - Typically functions as a
middleman between the borrower and the lender, negotiating, selling or arranging loans to be delivered to larger investors. At one time originated up to 80% of all mortgage loans. (Back on the rise)
- Mortgage Banker - correct answer - Entities which provide their own
funds for the purpose of providing mortgage financing, as opposed to commercial banks/savings associations. (Held, or "Warehoused")
- Correspondent Lender - correct answer - Usually smaller in scale
than mortgage bankers or brokers, these lenders typically extend loans with their own funds, at their own risk.
- Processing - correct answer - Once application is complete the file
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moves into this phase.
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- Underwriting - correct answer - The detailed process of evaluating a
borrower's loan application to determine the risk involved for the lender.
- Closing - correct answer - The consummation of a real estate
transaction in which all appropriate documents are signed and the proceeds of the mortgage loan are then disbursed by the lender.
- Servicing - correct answer - Includes collecting monthly payments,
maintaining records of payments and balances, collecting and paying taxes and insurance ( and managing escrow and impound funds) remitting funds to the note holder, and following up on delinquencies.
- Supply and Demand - correct answer - an economic concept that
states that the price of a good rises and falls depending on how many people want it and depending on how much of the good is available.
- Funding - correct answer - The process of transferring funds to a title
or escrow company for disbursement
- The Safe Act - correct answer - Designed to enhance consumer
protection and reduce fraud. (Key component of HERA)
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