Question 1

A schedule that shows how much of each payment will be applied to principal and how much toward interest over the life of the loan is called a/n:

Accepted Answer

An amortization schedule is a table showing how much of each payment is applied to interest and how much to principal. It also shows the gradual decrease of the loan balance until it reaches zero.

Question 2

In simple terms, a sum of borrowed money (principal) usually repaid with interest is called a:

Accepted Answer

A sum of borrowed money generally repaid with interest is simply a loan.

Question 3

A broker who is hired by an owner to sell his property must reveal all significant and material information to the principal. Which of the following would be considered material information and must be revealed?

Accepted Answer

The existence of a better offer that is imminent could very well be a material fact to the seller. If would probably influence his decision on a present offer.

Question 4

Which of the following is not a necessary element in the formation of a contract:

Accepted Answer

Two parties may enter into a contract, but they might not fulfill (perform) their obligations.

Question 5

What is "community property"?

Accepted Answer

Community property, an outgrowth of the Spanish and Mexican heritage of the area, determines that property acquired by a married couple during their marriage is considered to be jointly owned.

Question 6

Which of the following items is usually considered to be a cost of home ownership?

Accepted Answer

The interest that is lost on owner's equity is usually identified as lock in equity. This term applies to the fact that the owner cannot utilize the funds for other investment purposes.

Question 7

When ownership of a mortgage is transferred from one company or individual to another, it is called:

Accepted Answer

When ownership of a mortgage is transferred (assigned) from one company or individual to another, it is called an assignment.

Question 8

An insurance policy which combines personal liability insurance and hazard insurance coverage for a dwelling and its contents is called:

Accepted Answer

Homeowner's insurance combines personal liability insurance and hazard insurance coverage for a dwelling and its contents.

Question 9

A right-of-way which gives persons other than the owner access to or over a property is known as an:

Accepted Answer

An easement is a right-of-way to persons other than the owner and gives them legal access.

Quiz 1: Real Estate