PSI Online Practice Examination

1

PSI Online Practice Examination Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

What is the definition of "amortization"?

• The process of evaluating the property’s value over time

✔✔B) The gradual repayment of a loan over its term through regular payments of both principal and interest

• The process of refinancing a loan
• The total cost of closing the loan

What is the definition of “equity” in real estate?✔✔A) The difference between the market value of a property and the outstanding mortgage balance

• The total loan amount on a property
• The total value of the property’s improvements
• The amount of rent paid to the landlord

What is the purpose of a "home appraisal"? 1 / 4

2

• To determine the amount of closing costs

✔✔B) To estimate the market value of a property based on its features and location

• To verify the buyer’s financing
• To inspect the property for damage

What does the term "home equity loan" mean?✔✔A) A loan that allows a homeowner to borrow against the equity in their property

• A loan used to purchase a home
• A loan provided by the government to first-time buyers
• A loan used for home repairs

What is the primary role of a "buyer’s agent" in a real estate transaction?✔✔A) To assist the buyer in finding and purchasing a property

• To negotiate the sale price on behalf of the seller
• To evaluate the condition of the property
• To provide financing options to the buyer

What does the term "closing disclosure" refer to? 2 / 4

3

• A summary of the buyer’s credit report

✔✔B) A document provided to the buyer that outlines the final costs of the transaction, including closing costs

• A document that records the seller’s listing price
• A form that verifies the completion of the sale

What does “seller’s disclosure” mean?✔✔A) A document in which the seller discloses any known issues or defects with the property

• A form the buyer signs to agree to the sale
• A document stating the listing price of the property
• A legal form that finalizes the transfer of ownership

What is the primary function of a real estate broker?

• To appraise the value of the property

✔✔B) To facilitate the buying and selling of property by acting as an intermediary

• To provide financing options to buyers
• To inspect properties for damage
• / 4

4

What does the term "closing costs" refer to?

• Costs paid only by the seller

✔✔B) Expenses associated with the finalization of a real estate transaction, paid by both the buyer and the seller

• Costs related to the mortgage loan approval process
• The fees paid to a real estate agent

What is the difference between a "fixed-rate mortgage" and an "adjustable-rate mortgage"?✔✔A) A fixed-rate mortgage has an interest rate that remains the same throughout the loan term, while an adjustable-rate mortgage’s interest rate may change over time

• A fixed-rate mortgage has a shorter loan term than an adjustable-rate mortgage
• An adjustable-rate mortgage is for commercial properties, while a fixed-rate mortgage is for

residential properties

• A fixed-rate mortgage is more expensive than an adjustable-rate mortgage

What does the term "escrow" mean in real estate transactions?

• A type of loan for homebuyers

✔✔B) An account where funds or documents are held by a third party until the terms of a contract are fulfilled

• / 4