Texas Real Estate Sales Agent Practice Exam

1. A candidate answers exactly the minimum required number of questions correctly on BOTH the National and State portions of the Texas sales exam. What is the combined total of correct answers across the two portions at those minimum thresholds?

• A. 56 questions
• B. 71 questions
• C. 84 questions
• D. 112 questions

2. A homeowner discovers that an item was permanently affixed to the land in a way that it is now legally treated as part of the real property rather than as personal property. Which factor is MOST commonly used to determine whether such an item has become part of the real property?

• A. The original purchase price of the item
• B. The method and permanence of attachment, along with the intent of the party who attached it
• C. The color and style of the item
• D. Whether the item was manufactured domestically

3. A form of property ownership grants an owner the fullest, most complete bundle of rights available, of potentially infinite duration, and is freely transferable and inheritable. Which characteristic BEST distinguishes this estate from a lesser estate?

• A. It automatically terminates on the owner's death
• B. It conveys the most complete ownership interest, of indefinite duration, and passes to heirs
• C. It grants only the right to use the property for a fixed number of years
• D. It cannot be sold or mortgaged without government approval

4. On the National portion of the Texas sales examination, what is the minimum number of questions a candidate must answer correctly to pass?

• A. 28 questions
• B. 43 questions
• C. 56 questions
• D. 60 questions

5. Two people take title to a property together with the right of survivorship, meaning that when one owner dies, that owner's interest passes automatically to the surviving co-owner rather than to the deceased owner's heirs. Which statement BEST describes the effect of the survivorship feature?

• A. The surviving co-owner automatically absorbs the deceased owner's interest, bypassing probate for that interest
• B. Each owner may will their share to a third party despite the survivorship feature
• C. The deceased owner's share is distributed to that owner's estate through probate
• D. The property is sold and the proceeds split among all heirs

6. A candidate must clear both the National and State portions of the Texas sales exam. What is the minimum number of correct answers required on the State examination?

• A. 28 questions
• B. 43 questions
• C. 56 questions
• D. 84 questions

7. An owner holds the surface rights to a parcel of land but has separately conveyed the rights to extract minerals beneath the surface to another party. This arrangement BEST illustrates which principle of property ownership?

• A. That surface owners always retain all subsurface rights regardless of any conveyance
• B. That the bundle of rights in land can be separated, so different parties may hold surface and subsurface rights
• C. That mineral rights can never be transferred apart from the surface
• D. That land ownership is a single indivisible right that cannot be split

8. A closing agent reviews a signed instrument intended to transfer land. Which one of the following is NOT among the requirements for the deed to be effective?

• A. It contains a legal description of the property
• B. It includes a granting clause and names the parties
• C. It is notarized by a licensed appraiser
• D. It is signed by the grantor and delivered and accepted

9. After receiving a valid deed, a purchaser promptly records it in the public land records. What is the primary legal effect of recording?

• A. It gives constructive notice to the world and establishes priority
• B. It eliminates the need for a granting clause
• C. It is required for the deed to be signed by the grantor
• D. It converts the fee simple into a life estate

10. In an easement appurtenant, the parcel that bears the burden of the easement is known as the:

• A. Servient tenement
• B. Dominant tenement
• C. Remainderman
• D. Grantor's reversion

11. An owner deeds property "to my brother for the duration of his life." The deed names no other party to take afterward. When the brother dies, what happens to the title?

• A. It is extinguished and the property escheats immediately
• B. It reverts to the grantor because no remainderman was named
• C. It automatically vests in the brother's heirs as fee simple
• D. It converts into an easement appurtenant

12. Two siblings each claim to have received the same parcel from their late parent. One received a quitclaim deed to the parcel; the parent, it turns out, held no interest in it at the time. What did the quitclaim deed convey to that sibling?

• A. Full fee simple absolute, by operation of the deed
• B. Whatever interest the grantor actually had — here, nothing
• C. A general warranty of clear title
• D. A life estate for the sibling's life

13. A lender recorded its mortgage lien years before the county recorded an unpaid property tax lien on the same parcel. At a forced sale, which lien is generally satisfied first?

• A. The mortgage lien, because it was recorded earlier
• B. The property tax lien, regardless of recording order
• C. Neither; liens are always paid pro rata
• D. Whichever lienholder demands payment first

14. An owner holds land in fee simple absolute but a neighbor's recorded easement appurtenant crosses part of it. Which statement best describes the owner's position?

• A. The owner still holds the most complete form of ownership, though the parcel is burdened as the servient tenement
• B. The easement automatically converts the owner's fee into a life estate
• C. The owner may cancel the easement simply by recording a new deed
• D. The easement gives the neighbor superior title to the whole parcel

15. A buyer wants the strongest possible assurance that the seller is defending title against any defect that arose at any point in the chain of ownership. Which deed should the buyer insist upon?

• A. Quitclaim deed
• B. General warranty deed
• C. A deed with no granting clause
• D. An unrecorded deed

16. A driveway easement lets the owner of Lot 1 cross Lot 2 to reach the road. When Lot 1 is later sold, the new owner continues to use the driveway. This is an example of which kind of encumbrance?

• A. A lien that must be re-recorded on each sale
• B. An easement appurtenant that runs with the land
• C. A life estate benefiting Lot 2
• D. A quitclaim conveyance of Lot 2

17. A downtown property owner sells the right to construct and use space in the air above the owner's building to a developer, while retaining ownership of the surface and everything below it. This transaction primarily involves which category of property rights?

• A. Air rights
• B. Riparian rights
• C. Mineral rights
• D. Littoral rights

18. A grantor signs a valid deed conveying property to a buyer but locks it in a drawer and never hands it over or otherwise conveys it to the buyer before the grantor dies. Has title passed to the buyer?

• A. Yes, because the deed was validly signed
• B. No, because a deed must be delivered and accepted during the grantor's lifetime to transfer title, and a signed but undelivered deed does not convey ownership
• C. Yes, because the deed was properly notarized
• D. No, because the buyer must also record the deed before the grantor signs it

19. A buyer purchases property but never records the deed. Later, the seller fraudulently sells the same property to a second, unsuspecting buyer who pays value, has no knowledge of the first sale, and promptly records. Which buyer is generally protected under typical recording act principles?

• A. The first buyer, because the first sale occurred first in time regardless of recording
• B. The second buyer, because recording acts generally protect a subsequent bona fide purchaser for value who records without notice of the earlier unrecorded interest
• C. Neither buyer, because the property automatically reverts to the seller
• D. Both buyers equally share ownership

20. A city adopts an ordinance limiting a neighborhood to single-family residential use, restricting how property owners in that area may develop or use their land. Which government power authorizes this type of land-use regulation?

• A. Eminent domain
• B. Police power
• C. Escheat
• D. Taxation

21. A dispute arises over whether a custom-built bookshelf, bolted to the wall by the seller, is a fixture that stays with the house or personal property the seller may remove. Which factor is generally considered LEAST relevant to resolving this question?

• A. The method and permanence of attachment to the property
• B. Whether the item was intended to become a permanent part of the property
• C. Any agreement between the parties addressing the item
• D. The original purchase price the seller paid for the item

22. A tenant rents an apartment on a month-to-month basis with no specified end date, and the tenancy automatically renews each month until either party gives proper notice to terminate. What type of leasehold estate is this?

• A. A periodic tenancy
• B. A tenancy for years
• C. A tenancy at will
• D. A tenancy at sufferance

23. A landowner subdivides a large parcel, and the resulting rear lot has no access to a public road except by crossing the front lot that was sold to someone else. What type of easement is likely to be implied to give the rear lot access?

• A. An easement in gross
• B. A prescriptive easement
• C. A license
• D. An easement by necessity

24. A deed conveys land "to the city for so long as it is used as a public park," with the grantor retaining the right to automatically regain the property if that condition is ever violated. What type of estate has the city received?

• A. A life estate
• B. A fee simple absolute
• C. A fee simple determinable
• D. A leasehold estate

25. A property borders a flowing river, and the owner has the right to reasonable use of the water and access to the water's edge, with the boundary potentially shifting gradually as the river's course changes over time. What category of rights does this describe?

• A. Littoral rights
• B. Riparian rights
• C. Subsurface rights
• D. Air rights

26. A candidate observes that the National passing threshold is a multiple of the State passing threshold. Exactly what multiple of the State threshold is the National threshold?

• A. 1.5 times
• B. 2 times
• C. 2.5 times
• D. 3 times

27. A candidate must pass both the National and State examinations. What is the combined minimum number of correctly answered questions across both examinations?

• A. 56 questions
• B. 72 questions
• C. 84 questions
• D. 96 questions

28. A candidate wants to know whether the State examination passing standard is higher or lower than the National passing standard, in terms of the number of questions required correct. Which statement is accurate?

• A. The State standard is higher than the National standard
• B. The State standard is lower than the National standard
• C. The two standards are identical
• D. The State standard is exactly double the National standard

29. A 16-year-old signs a purchase agreement to buy a condominium. Which term most accurately describes the resulting contract?

• A. Void.
• B. Voidable.
• C. Unenforceable.
• D. Fully binding on the minor.

30. A buyer proposes a change to the closing date and initials the change on the offer before returning it. Assuming the change is material, which best explains why no contract has yet formed?

• A. Consideration is missing, so no valid contract can exist.
• B. Because acceptance must be unqualified, the material change is a counteroffer, and a counteroffer extinguishes the original offer rather than accepting it.
• C. The Statute of Frauds bars any change to a written offer.
• D. An offer becomes irrevocable once written, so it cannot be altered.

31. A seller receives a written offer and returns it with the purchase price increased by a material amount, signing where indicated. In contract terms, what is the legal effect of the seller's response?

• A. It forms a binding contract because the seller signed the document.
• B. It is a conditional acceptance that keeps the original offer open.
• C. It operates as a counteroffer that rejects and extinguishes the original offer.
• D. It has no legal effect until the buyer signs again.

32. Which set of elements must all be present for a real estate contract to be valid?

• A. Mutual assent, consideration, legally competent parties, and a lawful object.
• B. Offer, earnest money, a licensed broker, and recording.
• C. Consideration, a contingency, a survey, and notarization.
• D. Mutual assent, a title policy, delivery, and acceptance.

33. Two neighbors shake hands on the oral sale of a house and agree on price, but nothing is put in writing. Under the Statute of Frauds, how is this agreement best classified?

• A. Unenforceable, because it is otherwise valid but cannot be enforced in court.
• B. Void, because it never existed legally.
• C. Fully enforceable, because both parties agreed on the price.
• D. Voidable, because either party may disaffirm it.

34. A written lease for a term of two years is agreed to orally but never reduced to writing or signed. Under the Statute of Frauds, is this lease enforceable?

• A. Yes, because leases are exempt from the Statute of Frauds.
• B. Yes, because oral agreements on price are always binding.
• C. No, because leases longer than one year must be in writing and signed by the party to be charged.
• D. No, because a lease can never be enforced without recording.

35. A prospective buyer emails a signed offer to purchase a home. Before the seller communicates any acceptance, the buyer sends a second email withdrawing the offer. Which statement best describes the buyer's ability to withdraw?

• A. The offer cannot be withdrawn once it has been put in writing and signed.
• B. The offer may be revoked at any time before acceptance is communicated.
• C. The offer may be revoked only if the seller has not yet read it.
• D. The offer becomes irrevocable the moment the seller receives it.

36. A seller performs fully, but the buyer refuses to close on a unique parcel. The seller asks a court to force the buyer to complete the purchase rather than merely awarding money. Which remedy is the seller seeking, and why is it available here?

• A. Liquidated damages, because the contract set a fixed sum.
• B. Revocation, because the offer can be withdrawn.
• C. Specific performance, because land is deemed unique.
• D. Rescission, because a contingency failed.

37. A purchase agreement provides that if the buyer defaults, the seller keeps the earnest money as the agreed measure of the buyer's default. This provision is an example of a:

• A. Liquidated damages clause.
• B. Financing contingency.
• C. Specific performance clause.
• D. Counteroffer.

38. A purchase contract states that the buyer's obligation to close depends on obtaining mortgage financing and a satisfactory inspection. These provisions are best described as:

• A. Counteroffers that must be separately accepted.
• B. Contingencies that must be satisfied before a party is obligated to perform.
• C. Liquidated damages clauses.
• D. Elements required for the contract to be valid.

39. A purchase contract includes a clause stating that all specified dates and deadlines, including the closing date, must be strictly performed exactly on time or the delay constitutes a material breach. What is this type of clause commonly called?

• A. A "time is of the essence" clause
• B. A merger clause
• C. A subordination clause
• D. An escalation clause

40. A prospective buyer pays a landowner $1,000 for the exclusive right, but not the obligation, to purchase a parcel at a set price any time within the next six months. What type of agreement have the parties created?

• A. A bilateral purchase contract
• B. A right of first refusal only
• C. A listing agreement
• D. An option contract, which the buyer may exercise or let expire, having paid consideration to keep the offer open

41. Two different agents both worked with the same buyer over time, and a dispute arises over which agent is entitled to the commission after the sale closes. Which concept is typically used to resolve which agent's efforts were the primary, uninterrupted cause of the completed sale?

• A. Procuring cause
• B. Subordination
• C. Constructive notice
• D. Estoppel

42. Under a listing agreement, the seller retains the right to sell the property directly without owing the listing broker any commission, but if any other party, including another broker, sells the property, the listing broker earns the commission. What type of listing is this?

• A. An exclusive right to sell listing
• B. An exclusive agency listing
• C. An open listing
• D. A net listing

43. A buyer and seller sign a purchase agreement, but the seller later argues the agreement is invalid because the seller received nothing of value in exchange for the promise to sell. Which essential contract element is the seller claiming is missing?

• A. Offer
• B. Acceptance
• C. Legal capacity
• D. Consideration

44. A buyer submits a written offer to purchase a home. Before the seller accepts, the buyer changes his mind and notifies the seller in writing that the offer is withdrawn. Assuming no option consideration was paid to keep the offer open, may the buyer withdraw it?

• A. No, once submitted an offer can never be withdrawn
• B. Yes, an offeror may generally revoke an offer any time before it is accepted, unless consideration was paid to hold it open
• C. No, the buyer must wait at least three business days before revoking
• D. Yes, but only if the seller has not yet read the offer

45. A seller receives a buyer's written offer and responds by crossing out the closing date and writing in a new one before signing and returning it. What is the legal status of the buyer's original offer at this point?

• A. It has been terminated by the seller's counteroffer, and the buyer is no longer bound by the original terms
• B. It remains open and binding on the buyer exactly as originally written
• C. It automatically becomes binding once the seller signs anywhere on the document
• D. It converts into an option contract

46. A seller induces a buyer to sign a purchase contract by intentionally lying about a material fact regarding the property. Once the buyer discovers the fraud, what is the legal status of the contract from the buyer's perspective?

• A. Voidable at the buyer's election, meaning the defrauded buyer may choose to rescind or affirm the contract
• B. Automatically void from the start with no choice available to either party
• C. Fully valid and enforceable exactly as written with no remedy available
• D. Automatically reformed by a court to remove only the false statement

47. A buyer discovers that the seller made a material misrepresentation about the property before the sale closed and wants to undo the transaction entirely and be restored to the buyer's original position rather than simply collect money damages. Which remedy is the buyer seeking?

• A. Specific performance
• B. Liquidated damages
• C. Novation
• D. Rescission, which unwinds the transaction and restores both parties to their pre-contract positions

48. A home sale closes partway through the year, and the buyer and seller must divide certain recurring expenses, such as property taxes, so that each party pays only for the portion of the year each owned the property. What is this closing calculation called?

• A. Proration
• B. Amortization
• C. Capitalization
• D. Subordination

49. A seller signs a listing agreement stating that the listing broker earns a commission on the sale of the property regardless of who actually procures the buyer, including if the seller finds the buyer without any agent's help. What type of listing is this?

• A. An exclusive right to sell listing
• B. An open listing
• C. An exclusive agency listing
• D. A net listing

50. A purchase contract states that the buyer's obligation to close is conditioned on the buyer obtaining loan approval by a specified date. If the buyer, acting in good faith, cannot obtain financing by that date, what is the typical effect of this contingency?

• A. The buyer forfeits the earnest money regardless of the reason for the financing failure
• B. The buyer may generally terminate the contract and recover the earnest money, since the condition precedent to closing was not satisfied
• C. The seller may force the buyer to close using cash instead
• D. The contract automatically converts into a lease-option arrangement

51. The total number of questions a candidate must answer correctly to pass BOTH the National and State portions combined is best described as which of the following?

• A. The sum of 56 and 28
• B. The sum of 56 and 43
• C. The sum of 240 and 56
• D. The sum of 43 and 28

52. A candidate answered exactly 56 items correctly on the National portion and exactly 28 items correctly on the State portion. Based solely on the stated passing thresholds, what is the outcome?

• A. Passed both portions
• B. Passed National only
• C. Passed State only
• D. Failed both portions

53. A candidate correctly answered 55 questions on the National portion. Relative to the passing standard for that portion, this result is:

• A. One correct answer short of passing
• B. Exactly at the passing threshold
• C. One correct answer above the passing threshold
• D. Below the State threshold but above the National threshold

54. A candidate must answer a minimum number of items correctly on the National portion to pass it. What is that minimum number of correct answers?

• A. 28 questions
• B. 43 questions
• C. 56 questions
• D. 60 questions

55. A buyer who is not represented by the agent asks the seller's agent whether the roof has a known, hidden leak. What does the agent owe this unrepresented buyer?

• A. The full range of fiduciary duties, including loyalty
• B. Nothing, because no relationship exists
• C. Honesty and fair dealing, including disclosure of known material latent defects, but not fiduciary duties
• D. Only a duty to keep the seller's information confidential

56. A property has a recorded mortgage from 2018 and unpaid property taxes assessed in 2022. If the property is sold to satisfy debts, which claim generally takes priority?

• A. The 2018 mortgage, because it was recorded first
• B. The property tax lien, because tax liens generally take priority over all other liens regardless of when they were recorded
• C. Neither, because both are extinguished by the sale
• D. Whichever creditor demands payment first

57. A homeowner hires a property manager to lease units, collect rent, and handle tenant matters across the property over an indefinite period. How is this agent best classified?

• A. A special agent, because the authority is limited to a single transaction
• B. A general agent, because the manager may bind the principal in a range of matters
• C. A customer, because no fiduciary duties are owed
• D. A subagent of the tenants

58. A 17-year-old minor signs a contract to purchase a home. Later the minor chooses to back out. How is this contract best characterized?

• A. Void, because it never existed legally
• B. Voidable, because a party may disaffirm it
• C. Unenforceable, because it was never in writing
• D. Fully binding on both parties

59. A grantor wishes to convey property with the strongest possible assurances, warranting title against all defects arising at any time. Which instrument accomplishes this?

• A. A quitclaim deed
• B. A general warranty deed
• C. A life estate
• D. A promissory note

60. A broker deposits a buyer's earnest-money check into the broker's own operating account to save a trip to the bank, intending to move it later. Which fiduciary duty has the broker most directly violated?

• A. Obedience, by ignoring the buyer's instructions
• B. Reasonable care, by acting carelessly
• C. Accounting, by commingling client funds with the broker's own funds
• D. Disclosure, by failing to inform the seller

61. An agent learns during a listing that the seller would accept far less than the asking price because the seller is going through a divorce. After the listing agreement terminates, may the agent reveal this to a prospective buyer?

• A. No, but only until the property is relisted with a different broker
• B. Yes, because the agency relationship has ended and all duties expire with it
• C. Yes, provided the agent first obtains the buyer's written consent
• D. No, because confidentiality survives termination and forbids revealing information that would harm the principal's bargaining position

62. A seller receives an offer and responds by returning the document with a higher price and a changed closing date. In contract terms, what has the seller's response accomplished?

• A. It accepts the offer, because a price is stated
• B. It operates as a counteroffer that rejects and extinguishes the original offer
• C. It creates a binding option contract in favor of the buyer
• D. It has no legal effect until the buyer signs again

63. A buyer and seller reach an oral agreement for the sale of a parcel of land, but nothing is put in writing. If the seller refuses to proceed, why is the buyer unlikely to enforce the agreement?

• A. Because oral agreements always lack consideration
• B. Because the Statute of Frauds requires contracts for the sale of real estate to be in writing and signed by the party to be charged
• C. Because land sales require a general warranty deed at the offer stage
• D. Because oral agreements are automatically void from the outset

64. A sales agent posts an advertisement for a listed property on social media featuring only the agent's personal name and phone number, with no mention of the sponsoring broker. Under Texas advertising rules, what is the problem with this advertisement?

• A. Advertising generally must include the sponsoring broker's name, since a sales agent may not advertise independently of the broker
• B. There is no problem; agents may advertise entirely under their own name
• C. The advertisement must include the seller's name
• D. The advertisement must include the buyer's lender's name

65. An agent tells homeowners in a neighborhood that property values are about to fall because members of a particular protected class are moving in, encouraging the homeowners to sell quickly and below market value. This practice is known as:

• A. Redlining
• B. Steering
• C. Commingling
• D. Blockbusting

66. A licensed agent wants to pay a referral fee to a friend who is not a licensed real estate agent for referring a buyer. Under Texas license law, is this generally permitted?

• A. No, compensation for real estate brokerage activity generally may only be paid to licensed persons, not unlicensed individuals
• B. Yes, referral fees to unlicensed persons are unrestricted
• C. Yes, but only if the unlicensed person signs a waiver
• D. Yes, provided the fee is under a certain small amount

67. A licensed sales agent wants to keep her license active and in good standing over time. Under Texas license law, what is generally required to maintain (renew) real estate licensure?

• A. No requirements; licenses never expire in Texas
• B. Sponsorship by a different broker every year regardless of circumstances
• C. Completing required continuing education and timely renewal with the Commission
• D. Retaking the original licensing examination every renewal cycle

68. A seller offers to let the listing broker keep any amount received above a stated minimum sale price as the broker's entire commission. How is this type of listing arrangement generally treated?

• A. It is a standard exclusive right to sell listing
• B. It is an open listing
• C. It is an exclusive agency listing
• D. It is a net listing, which is prohibited or heavily discouraged because it creates a conflict of interest

69. A prior occupant of a home died of natural causes in the home five years ago. Under Texas law, is this fact required to be disclosed to a prospective buyer?

• A. No, an occupant's death from natural causes is generally not required to be disclosed and does not constitute a material defect
• B. Yes, it must always be disclosed as a material fact affecting value
• C. Yes, but only if the buyer is purchasing with a VA loan
• D. Yes, but only if the death occurred within the last year

70. A landlord refuses to rent an apartment to a family because the family includes young children. Under federal fair housing law, this refusal is most likely a violation based on which protected class?

• A. National origin
• B. Familial status
• C. Disability
• D. Religion

71. A creditor holding an ordinary unsecured debt attempts to force the sale of a debtor's primary residence in Texas to satisfy the debt. Under Texas homestead law, what generally happens?

• A. The sale proceeds automatically because homestead law only protects rental property
• B. The homestead is generally protected from forced sale by most unsecured creditors, subject to limited exceptions such as valid mortgage or tax liens
• C. The debtor must first obtain court permission to keep the home
• D. The creditor may seize the home only after the debtor files bankruptcy

72. A broker deposits earnest money received from a buyer into the same bank account the broker uses to pay personal and office expenses. Which violation has the broker most likely committed?

• A. Conversion
• B. Fraud
• C. Commingling of funds
• D. Misrepresentation

73. A sales agent wants to begin listing and selling property independently, without being supervised by a broker. Under Texas license law, what must the sales agent do first?

• A. Sponsor with (be supervised under) a licensed broker
• B. Complete a single post-licensing course and practice independently
• C. Register directly with a title company
• D. Obtain a broker's license only after five years of sales experience

74. A consumer obtains a court judgment against a real estate license holder for fraud in a transaction but is unable to collect the judgment because the license holder has no recoverable assets. What recourse might the consumer have under Texas law?

• A. File a new lawsuit against the Texas Real Estate Commission directly
• B. Request that the license holder's broker personally pay the judgment
• C. Appeal directly to a federal court
• D. Apply to the Real Estate Recovery Trust Fund for reimbursement, subject to statutory conditions

75. A married couple purchases a home in Texas using income earned by either spouse during the marriage, and the deed does not specify separate property. How is this property most likely classified under Texas law?

• A. Separate property of whichever spouse's name appears first on the deed
• B. Tenancy in common automatically
• C. Community property, owned jointly by both spouses
• D. Property held in a life estate for both spouses

76. To pass, a candidate must answer a required number of items correctly on the National portion. What is that minimum number of correct answers?

• A. 28 questions
• B. 43 questions
• C. 56 questions
• D. 240 questions

77. On the State portion of the examination, what is the minimum number of questions a candidate must answer correctly to pass?

• A. 28 questions
• B. 84 questions
• C. 43 questions
• D. 56 questions

78. A candidate must clear both the National and State passing thresholds. Combining only the two published minimum-correct requirements, how many correct answers must the candidate achieve in total across both portions?

• A. 56 correct
• B. 71 correct
• C. 84 correct
• D. 96 correct

79. A buyer using a conventional loan makes a down payment of only ten percent. What additional cost is she typically required to carry?

• A. Private mortgage insurance, because her down payment is less than twenty percent
• B. An FHA guarantee fee
• C. A VA funding fee
• D. A discount point equal to twenty percent of the loan

80. A borrower wants to lower the interest rate on a new mortgage by paying cash up front at closing. Which financing tool accomplishes this, and how is each unit measured?

• A. Discount points, each equal to one percent of the loan amount, paid as prepaid interest to buy down the rate
• B. Private mortgage insurance, each unit equal to twenty percent of the loan
• C. An acceleration payment, equal to the full loan balance
• D. A RESPA referral credit, equal to the lender's fee

81. In a lien-theory jurisdiction, who holds legal title to the property while the mortgage debt remains outstanding?

• A. The lender holds legal title until the debt is repaid
• B. The county recorder holds title in trust
• C. Title is split equally between borrower and lender
• D. The borrower holds title and the lender holds only a lien

82. A borrower's mortgage financing consists of two core instruments. Which pair correctly describes them?

• A. A promissory note that evidences the debt and a mortgage or deed of trust that pledges the property as security
• B. A deed of reconveyance and a title insurance binder
• C. A listing agreement and a purchase contract
• D. An estoppel certificate and a lease assignment

83. On a $200,000 loan, how much would one discount point cost the borrower, and what is its purpose?

• A. $2,000, and it is a penalty for early repayment
• B. $2,000, and it is prepaid interest that buys down the interest rate
• C. $200, and it is a one-time origination fee
• D. $20,000, and it is a mandatory reserve deposit

84. Under which statute and implementing regulation must a lender disclose the annual percentage rate (APR) and total finance charge so borrowers can compare the true cost of credit?

• A. The Truth in Lending Act, implemented by Regulation Z
• B. The Real Estate Settlement Procedures Act, implemented by Regulation X
• C. The Fair Housing Act, implemented by Regulation B
• D. The Civil Rights Act of 1866

85. Which statement about the three primary loan categories is accurate?

• A. Conventional loans are not government-backed, FHA loans are insured by the FHA with low down payments, and VA loans are guaranteed for eligible veterans and can permit no down payment
• B. VA loans are insured by the FHA, and conventional loans permit no down payment
• C. FHA loans are guaranteed only for veterans, and conventional loans require government backing
• D. Conventional loans are insured by the FHA, and VA loans always require twenty percent down

86. After a borrower misses several payments, the lender demands the full remaining loan balance at once rather than just the past-due installments. Which mortgage provision permits this?

• A. The defeasance clause
• B. The alienation clause
• C. The subordination clause
• D. The acceleration clause

87. A homeowner refinances the loan on her principal residence. Under TILA, what protection does she have immediately after closing?

• A. A three-day right of rescission on certain refinances of a principal residence
• B. A thirty-day money-back guarantee on the appraisal fee
• C. An automatic reduction of her APR after three payments
• D. A waiver of all closing disclosures

88. A borrower is quoted a rate that requires paying one and a half discount points on a $160,000 loan to secure the lower rate. How much will the borrower pay in points at closing?

• A. $1,600
• B. $1,200
• C. $2,400
• D. $16,000

89. A borrower's adjustable-rate mortgage payment is recalculated periodically based on a published benchmark rate plus a fixed percentage the lender adds. What are these two components together called?

• A. The index and the margin
• B. The principal and the interest
• C. The discount and the origination fee
• D. The escrow and the impound

90. A lender divides the loan amount by the property's appraised value to help determine how much risk the lender is taking on relative to the collateral. What is this calculation called?

• A. Loan-to-value ratio
• B. Debt-to-income ratio
• C. Amortization schedule
• D. Capitalization rate

91. A first-time buyer with limited savings and a lower credit score is steered toward a government-insured loan program that permits a smaller minimum down payment than most conventional loans. Which loan type is being described?

• A. VA loan
• B. FHA loan
• C. USDA loan
• D. Conventional loan with 20 percent down

92. A borrower chooses a loan whose interest rate and payment stay the same for the entire loan term, giving predictable monthly housing costs. What type of loan has the borrower selected?

• A. Adjustable-rate mortgage
• B. Balloon mortgage
• C. Graduated payment mortgage
• D. Fixed-rate mortgage

93. A lender evaluates a borrower's income, assets, debts, and credit history before extending a mortgage, in keeping with federal rules designed to ensure borrowers are extended loans they can realistically repay. This underwriting standard is best described as an application of which concept?

• A. The Statute of Frauds
• B. The doctrine of caveat emptor
• C. The ability-to-repay standard
• D. The subordination clause

94. A seller who owns a property free and clear agrees to act as the lender, allowing the buyer to make payments directly to the seller instead of obtaining a bank loan. What is this arrangement commonly called?

• A. A wraparound mortgage
• B. An assumption
• C. A blanket mortgage
• D. Seller (owner) financing

95. A borrower's loan has low monthly payments for several years, but the remaining unpaid balance becomes due in a single lump sum at the end of the term. What type of payment structure is this?

• A. Fully amortized loan
• B. Negative amortization loan
• C. Balloon payment loan
• D. Graduated payment loan

96. A lender collects a portion of a borrower's property taxes and homeowner's insurance premium with each monthly mortgage payment and holds the funds until the bills come due. What is this account called?

• A. A trust account
• B. An earnest money account
• C. A reserve fund
• D. An escrow (impound) account

97. A buyer's lender requires mortgage insurance because the buyer's down payment is less than 20 percent of the purchase price on a conventional loan. What is the primary purpose of this insurance?

• A. It protects the lender against loss if the borrower defaults
• B. It protects the borrower against loss of the down payment
• C. It replaces the need for a title insurance policy
• D. It guarantees the borrower a fixed interest rate for the life of the loan

98. A borrower pays an upfront fee at closing equal to a percentage of the loan amount in exchange for a permanently reduced interest rate over the life of the loan. What is this fee called?

• A. An origination fee
• B. A discount point
• C. A recording fee
• D. An escrow deposit

99. A buyer who is an eligible veteran wants a loan with no down payment requirement and no ongoing monthly mortgage insurance premium. Which loan program is designed for this buyer?

• A. FHA loan
• B. Conventional loan
• C. VA loan
• D. USDA loan

100. A borrower wants to pay off her mortgage early but discovers her loan documents impose a fee for doing so within the first several years. What is this fee called?

• A. An origination fee
• B. A prepayment penalty
• C. A discount point
• D. An acceleration fee