NATIONAL INTERACTIVE STUDY GROUP UNIT 8 QUESTIONS

NATIONAL INTERACTIVE STUDY GROUP UNIT 8 QUESTIONS

National Interactive Study Group 2 SESSION 8 JOHN MATHIS

Notes for Tonight 1. To MUTE your phone line use *6 2. To UNMUTE your phone line use #6 3. Chat is the best way to communicate questions. 3

Notes for Tonight If you are a new student please send an email to nationalleadinstructor@kaplan.com 4 with New Student in the subject line.

Tonight s Topics 1. Your questions 2. Mortgage and deed of trust terms 3. FHA and VA mortgages 4. Fair Housing 5. Capital gains 5

QUESTION 6 FHA mortgages are assumable but VA mortgages are not. True False

QUESTION The market value of the property minus the total debt defines A. Market price B. Equity C. Assessed value D. Market value 7

QUESTION A fee that increases the yield a lender will receive on a loan is A. Loan origination fees B. Discount points C. Prorated rents D. Closing costs 8

Question 9 Two borrowers purchased a property for $90,000 with 10% down. They decided to buy the interest rate down by paying two points at closing. If the down payment and points are the only closing costs, how much will the buyer bring to closing?

QUESTION 10 In what mortgage would the mortgagee make payments to the mortgagor? A. Interest only B. Partially amortized C. Reverse D. FHA

PRACTICE QUESTION The buyer was unable to qualify for a new loan on a house they had made an offer on. The seller agreed to carry the buyers loan for fifteen years using a contract for deed. In this form of owner carry A. The buyer will not receive possession until the final payment is made. B. At closing both title and possession will pass to the buyer. C. During the loan period the seller will retain equitable title of the property. D. The seller holds the deed, the buyer has possession and will receive title upon final payment on the loan. 11

PRACTICE QUESTION The first step is to determine what the question is. The buyer was unable to qualify for a new loan on a house they had made an offer on. Not needed The seller agreed to carry the buyers loan for fifteen years using a contract for deed. In this form of owner carry Key point: the question is about seller carry and specifically a contract for deed.. 12

Analyze the answer choices. PRACTICE QUESTION A. The buyer will not receive possession until the final payment is made. This would mean the buyer is paying for a property but not living in it. B. At closing both title and possession will pass to the buyer. This is true of a purchase money mortgage not a contract for deed. C. During the loan period the seller will retain equitable title of the property. The seller still holds legal title the buyer has equitable title. D. The seller holds the deed, the buyer has possession and will receive title upon final payment on the loan. This is the correct answer 13

PRACTICE ANSWER D. The seller holds the deed, the buyer has possession and will receive title upon final payment on the loan. 14 The buyer gets possession but not title. In a land contract, installment contract or contract for deed the seller acts as the bank keeps the deed/title to the property until the last payment is made.

QUESTION An umbrella term for unfair and illegal lending practices is A. Subprime loan B. Predatory lending 15

QUESTION 16 What was the acronym for the federal fair housing protected classes?

QUESTION A broker owns a four unit apartment and lives in one unit. She does not rent to families with children. This is allowed under fair housing exemptions. True False 17

QUESTION A married couple has sold their primary home for $700,000 they will owe capital gains tax on how much of the sale? A. The full price B. $500,000 C. None since is the primary residence D. $200,000 18

QUESTION A tax advantage an investor may use that helps offset the lack of liquidity in real estate is A. A 1031 exchange B. No capital gain on sales below $500,000 19

Notes for Tonight Any questions I missed or that you still have? 20 Remember if you think of something after class you can reach me at : nationalleadinstructor@kaplan.com New students add: New Student in the subject line.