Free Real Estate Sales Exam Questions That Helps Candidates Pass

The acceleration clause gives lenders the right to call the entire loan due if the borrower defaults. The alienation clause (C) requires payoff upon transfer of property. Escalation (A) adjusts interest rates, and defeasance (D) cancels the lender’s rights once the loan is repaid.

A reverse mortgage allows seniors to convert home equity into income, with repayment due when they move, sell, or die. Balloon mortgages (A) require lump-sum payoff. ARMs (C) have variable interest rates. Package mortgages (D) include real and personal property.

A contract is executory until all terms are performed, such as closing and deed transfer. Once fully performed, it becomes executed. Void contracts (C) lack essential elements. Voidable contracts (D) can be rescinded by one party.

FHA loans require borrowers to pay MIP, protecting lenders against default. VA loans (B) require no PMI or MIP. USDA loans (C) may require a guarantee fee. Conventional loans (D) may require private mortgage insurance (PMI) if down payment is under 20%, but not MIP.

Puffing is exaggeration of opinion (e.g., “best view”), which is legal unless it crosses into false statements of fact. Fraud (A) is intentional deception. Misrepresentation (B) is false factual claims. Concealment (D) is hiding defects. On exams, puffing = opinion, misrepresentation = fact.