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NH Real Estate Exam
| Term | Definition |
|---|---|
| A "jumbo loan" is also known as: | a non-conforming loan a jumbo loan is also sometimes referred to as a non-conforming loan. the limits are $435,100 for Fannie Mae and Freddie Mac as of 2018 |
| What is the difference between market value of a property and the debt on the property including all liens? | Equity Equity is the difference between the market value and the debt on the property |
| The FHA uses what to pay lenders, within the limits, resulting from foreclosure? | Mutual Mortgage Insurance The FHA insures loans with Mutual Mortgage Insurance |
| The amount of the outstanding balance on a mortgage not including any interest or other charges is called: | The Principle the principle balance is the outstanding balance of principle on a mortgage that does not include any interest or other charges |
| Mark, the seller, did not disclose the special assessment that will be due to the new owner in the near future after the sale is made even though Mark knew of this development beforehand. In this case, Mark: | Has committed fraud Both agents and sellers have the commitment to disclose any and all pertinent facts about a property |
| If an object is attached to real property and later becomes detached from said real property to become personal property, what is the called? | Severance severance is when an item that was once attached to real property becomes detached from that real property and is now considered personal property. It changed from real property to personal through severance. |
| In New Hampshire, if a broker does not already have an established trust account, such as in case of never receiving deposits, earnest monies, or any other third party funds as part of transactions, the broker must open a trust account within: | 1 business day In New Hampshire, as part of receiving funds for a transaction the broker must open a designated trust account within one business day. |
| This is issued to the holder of a certificate of sale after the one year redemption period has passed under the terms of the mortgage foreclosure proceeding | A sheriff's deed A sheriff's deed is issued to the holder of a certificate of sale after the one year redemption period has passed under the terms of the mortgage foreclosure proceeding |
| To match the specifications of a subject property, in the market data approach to appraisal, the sales prices of comparable properties are: | Adjusted in the sales or market data approach to appraisal, the sales prices of comparable properties are adjusted to match the specifications of a subject property |
| The relationship between economic life of a house and physical life of a house is: | Shorter economic life than longer physical life because most houses become dilapidated before they are physically falling down, the house can no longer be used for reantal income or for residential uses. The economic life of a house is shorter. |
| A fiduciary who holds or controls property for the benefit of another is called: | A trustee A trustee is a fiduciary who holds or controls property for the benefit of another. |
| Any encumbrance placed on a property without the owner’s consent is considered: | An involuntary lien An encumbrance is usually a monetary amount placed against the property. This is also called a lien. An encumbrance placed involuntarily can be considered an involuntary lien. |
| In New Hampshire, the institution that is to protect the public from incompetence or dishonesty by real estate licensees and creates a fair and functioning regulatory environment for the real estate industry is called the: | New Hampshire Real Estate Commission In NH, the institution that is to protect the public from incompetence or dishonesty by real estate licensees and creates a fair and functioning regulatory environment for the real estate industry |
| The surface of the earth and the material beneath the surface of the earth is part of the: | Real property Parts of real property include the surface of the earth and the material beneath the surface of the earth. |
| A written decision of the court, that when recorded creates a lien is known as: | An abstract of judgment An abstract of judgment is a written decision of the court that when recorded creates a lien. |
| Careful zoning can have which effect on property values? | Increased property value Proper and careful zoning can increase property values by means of the Principle of Conformity. |
| When more than one property is placed as security for a note and trust deed, this is called what type of encumbrance? | Blanket A blanket encumbrance is placed when more than one property is used as security for a not and trust deed. |
| If personal property is affixed in a permanent manner to real property, it becomes what is called a(n): | Fixture A fixture is when personal property is attached in a permanent manner to real property. An example of this would be cabinets that are built into a wall. |
| If Jonathan, a realtor, slanders the business practices of another realtor, Janice, saying that she deals unfairly with clients and steers people to neighborhoods she thinks they can afford, this would be: | A violation of the National Association of Realtor’s Code of Ethics by Jonathan The National Association of Realtor’s Code of Ethics states that “The Realtor shall not publicly disparage the business practice of a competitor”. |
| In the exercise of police power, which of these is NOT related: | Compensation Compensation need not be paid in the exercise of police power. It is to be used by the state for the public health, safety, morals, and general welfare of the people. |
| Loan-to-value is best described as: | The percentage relationship between the amount of the loan and the appraised value or sales price |
| What is the largest and most important function of the FHA? | Insurance Historically, the major activity (and largest) of the FHA is the insurance of mortgages for construction and home purchases. |
| If a person who works for a private corporation wants to participate in an employer-sponsored investment plan that allows them to set aside tax-deferred income for retirement or emergency purposes, they would enroll in a: | 401(k) plan A 401(k) plan is provided by a for-profit private corporation to allow individuals to set aside tax-deferred income for retirement or emergency purposes. A 403(b) is provided by non-profit organizations and functions in much the same way. |
| A person who is required to reside on the property and to sign a claiming statement is most likely referring to this: | A homestead In order to file a valid homestead, the person must reside on the property at the time of recording the homestead and also sign a statement that claims the property as a homestead. |
| According to the EPA, real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant is called: | Brownfields Brownfields are the real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant, as defined by the EPA. |
| If a lender is issuing an FHA or VA loan, where does the funding originate? | From the lender Ginnie Mae is the name for the Government National Mortgage Association. It provides guarantees of funds for FHA and VA loans. The funds for the loans themselves come from the lender. |
| In New Hampshire, which law governs the agency relationships between buyers, sellers, landlords and tenants, and licensees? | The Brokerage Relationships in Real Estate Transactions Act In New Hampshire, the Brokerage Relationships in Real Estate Transactions Act governs the agency relationships between buyers, sellers, landlords and tenants, and licensees. |
| The best description of an individual’s credit history is: | A record of an individual’s repayment of debt The best description of an individual’s credit history is a record of an individual’s repayment of debt. |
| A bequest is when: | Personal property is transferred by will Historically the term bequest is for personal property and devise is for real property. In modern times, the two terms are used interchangeably on most occasions. |
| If the Federal Reserve Board lowered the reserves required of member banks, this would do what to the amount of money available in the national economy? | Increase the amount of money available in the economy If the Federal Reserve Board lowers the reserves required of member banks this increases the amount of money available in the national economy. |
| A transfer tax is a: | Both a state and local tax that is payable when title passes from one owner to another |
| In New Hampshire, if a trust account has been opened by a broker, this entity must be notified within one month and be provided with the bank name and the account name or number for each trust account they control: | The New Hampshire Real Estate Commission the New Hampshire Real Estate Commission must be notified within one month and be provided with the bank name and the account name or number for each trust account they control. |
| An organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts is called a: | Servicer A servicer is a company or organization that collects principal and interest payments from borrowers and manages borrowers’ escrow accounts |
| When Larry, a homeowner of his personal residence, is preparing his taxes at the end of the year and he decides to deduct the tax paid on his personal residence, this would be: | Tax-deductible Property taxes that are paid on a homeowner’s personal residence are considered tax-deductible |
| If a lender determines that there is a high loan-to-value ratio, this means that the loan is: | High risk A high loan-to-value ratio means that the loan is high risk. In most situations, this means that the LTV is above 80%, which would require a borrower to purchase mortgage insurance until the LTV was below 78%. |
| Government loans are insured by: | FHA The Federal Housing Administration (FHA) is the institution that insures government loans. |
| Adjustable rate loans are loans in which: | Interest rates vary over the term of the loan When interest rates vary over the term of the loan this is called an adjustable rate loan. |
| In order to legally deprive a borrower who is in default of his or her interest in the mortgaged property, the legal process that would be initiated is called a(n): | Foreclosure A borrower who is in default may be legally deprived of his or her interest in a mortgaged property by means of foreclosure. |
| A violation of the Sherman Anti-Trust Act could be: | Competing Brokers discussing fees and business practices Any discussion between competitors could be seen as an attempt to conspire to set the cost of real estate brokerage services, which is in violation of the Sherman Anti-Trust Act. |
| Federal Savings and Loan Associations are what funding source for residential mortgages? | The primary source The primary source of funds for residential mortgages is federal savings and loan associations. |
| Of the following, which line items are not tax deductible for homeowners? | All of these All of the answers given are items that are not tax deductible for homeowners. These include homeowner’s insurance premiums, FHA mortgage insurance premiums, and private mortgage insurance premiums. |
| If a minority person is looking to purchase a home and the lender refuses to lend to them based on their creditworthiness, this is: | Legal A lender is not required to lend to any person that does not meet the requirements of creditworthiness. |
| An official charge against property as security for the payment of a debt or an obligation owed for services rendered is: | A lien A lien is an official charge against property as security for the payment of a debt or an obligation owed for services rendered. |
| David, a broker, has recently finalized a deal for the purchase of one of his listings. The buyer has given him earnest money. What must David do next with the earnest money? | Deposit the money in an escrow account All earnest money must be placed in an escrow account. Earnest money cannot be mixed with personal accounts, business operating accounts, or other locations |
| When all the papers are drawn up correctly and everything is ready for the final steps to close the escrow, which typically includes recording the deed, the escrow is called: | Complete A “complete” escrow includes all the properly prepared paperwork and is ready to close the escrow. |
| A property report that contains pertinent information about the subdivision and discloses to the prospective buyer that he or she has a minimum of 7 days in which to rescind the purchase agreement is required under: | The Interstate Land Sales Full Disclosure Act Requires a property report that contains pertinent information about the subdivision and discloses to the prospective buyer that he or she has a minimum of 7 days in which to rescind the purchase agreement. |
| The statement “present worth to typical users or investors of all rights to future benefits, arising out of property ownership” is best describing: | The value of a property The value of a property is best described by this statement. |
| Homeowner’s insurance is an insurance policy that: | Combines personal liability insurance and hazard insurance coverage for a dwelling and its contents |
| A delinquent mortgage payment occurs when: | The payment is not paid when due |
| In New Hampshire, the real estate commissioner is: | Not part of the commission In New Hampshire, the real estate commissioner is elected by the commission and is not part of the commission. This is in contrast to other states where the commissioner is part of the commission and is its leader. |
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