Free Utah Finance Practice Test — LicenseIQ

Question 1

Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.

Accepted Answer

An addendum ADDs new terms; an amendment changes existing terms. Both require agreement of both parties.

Question 2

The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

Accepted Answer

The income statement (P&L) summarizes income and expenses for the accounting period, typically monthly.

Question 3

A buyer client tells her agent she has just been laid off and may not qualify for the loan. The agent's duty regarding this fact is best described as:

Accepted Answer

Utah's rule excepts the client's ability to perform from confidentiality, so the agent may not conceal or misrepresent it. Treating it as protected confidential information is the trap.

Question 4

A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

Accepted Answer

Loan = cost of points / points as a percentage = $4,500 / 0.015 = $300,000.

Question 5

A financing contingency in a purchase agreement protects the:

Accepted Answer

A financing (mortgage) contingency lets the buyer cancel without penalty if unable to secure the specified loan by the deadline.

Question 6

A buyer purchases a $300,000 home with a $60,000 down payment. What is the loan-to-value (LTV) ratio?

Accepted Answer

Loan = $300,000 - $60,000 = $240,000; $240,000 / $300,000 = 80% LTV. (20% is the down payment percentage.)

Question 7

A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

Accepted Answer

RESPA prohibits kickbacks and unearned referral fees between settlement service providers and real estate licensees, even if disclosed.

Question 8

After the Financing & Appraisal Deadline, the buyer's loan fails to fund and either party cancels. Under the REPC, the seller's remedy is:

Accepted Answer

REPC Section 8.3(b)(iii) makes the earnest money the seller's exclusive remedy as liquidated damages. Specific performance is a Section 16 default remedy, not available here.

Question 9

A conventional loan that exceeds the conforming loan limits set by the FHFA is called a:

Accepted Answer

Loans above the conforming limits cannot be sold to Fannie Mae/Freddie Mac and are non-conforming 'jumbo' loans, usually at higher rates.

Question 10

Which document is recorded in the county records and makes the property collateral for a loan?

Accepted Answer

The mortgage creates the lien and is recorded. The promissory note is the borrower's personal promise to repay and is not recorded.

Question 11

Under TRID, the borrower must receive the Closing Disclosure at least how long before loan closing?

Accepted Answer

The Loan Estimate is due within 3 business days after application, and the Closing Disclosure at least 3 business days before closing.

Question 12

A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

Accepted Answer

Purchase price = loan / LTV = $276,000 / 0.80 = $345,000. ($220,800 wrongly multiplies by 0.80.)

Question 13

Using an amortization factor of 4.77415 per $1,000 (30 years at 4%), what is the monthly principal and interest payment on a $250,000 loan?

Accepted Answer

$250,000 / $1,000 = 250; 250 x 4.77415 = $1,193.54.

Question 14

A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

Accepted Answer

Commission = $389,000 x 0.05 = $19,450. Total costs = $19,450 + $212,600 + $1,200 + $1,950 + $600 = $235,800. Net = $389,000 - $235,800 = $153,200.

Question 15

An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

Accepted Answer

Conditioning one service on the purchase of another is a tying arrangement prohibited by antitrust law.

Question 16

The mortgage clause that allows the lender to declare the entire balance due immediately upon the borrower's default is the:

Accepted Answer

The acceleration clause lets the lender call the entire debt due on default. The alienation (due-on-sale) clause is triggered by transfer of the property.

Question 17

A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

Accepted Answer

USDA Rural Development loans serve eligible rural buyers who meet income limits, often with no down payment.

Question 18

Which federal law requires disclosure of the true cost of credit, including APR?

Accepted Answer

The Truth in Lending Act (Regulation Z) requires disclosure of finance charges and the APR. RESPA covers settlement costs.

Question 19

A property has a first mortgage (recorded 2015), a judgment lien (2018), a mechanic's lien (2020) and unpaid property taxes. Which is paid FIRST from sale proceeds?

Accepted Answer

Real property tax liens take priority over all others regardless of recording date; other liens generally follow in order of recording.

Question 20

A loan whose payments are not large enough to pay it off by the end of the term, leaving a large final payment, is a:

Accepted Answer

Partially amortized loans require a balloon payment at maturity. Negative amortization means the balance actually increases because payments don't cover interest.

Question 21

Settlement under a Utah REPC occurs on Tuesday, July 28, 2026. Loan funding and recording must be completed no later than:

Accepted Answer

REPC Section 3.2 requires funding and recording within four calendar days after Settlement, so July 29 through August 1. Using business days gives August 3.

Question 22

In a mortgage, the borrower who pledges the property as security is the:

Accepted Answer

The mortgagor (borrower) gives the mortgage to the mortgagee (lender) in exchange for the loan.

Question 23

A home sells for $615,000. The seller pays a 5.5% commission, a $348,200 loan payoff, a $2,150 owner's title policy, a $475 escrow fee, and a $1,640 tax proration debit. The seller's net proceeds are:

Accepted Answer

Commission is $33,825. Total debits are 33,825 + 348,200 + 2,150 + 475 + 1,640 = $386,290, and $615,000 − $386,290 = $228,710. $230,350 leaves out the tax proration.

Question 24

Buyer debits: $389,000 price, $525 escrow fee, $3,875 loan costs. Buyer credits: $4,000 earnest money, $311,200 new loan, $2,500 seller concession, $1,137 tax proration. Cash due from the buyer at closing is:

Accepted Answer

Debits total $393,400 and credits total $318,837, so $393,400 − $318,837 = $74,563. $76,837 counts the tax proration as a debit instead of a credit.

Question 25

A mortgage broker offers a Utah agent $500 for each client referred. The agent may:

Accepted Answer

R162-2f-401b(1)(m) prohibits accepting a referral fee from a lender or mortgage broker, regardless of disclosure. The $250 figure applies to gifts to unlicensed referrers.

Utah real estate finance practice test

1. Adding a new financing contingency to an existing sales contract is done by a(n) , while changing the existing closing date is done by a(n) .

2. The periodic report a property manager gives the owner showing rents and other income collected and expenses paid for the period is the:

3. A buyer client tells her agent she has just been laid off and may not qualify for the loan. The agent's duty regarding this fact is best described as:

4. A borrower pays $4,500 for 1.5 discount points. What is the loan amount?

5. A financing contingency in a purchase agreement protects the:

6. A buyer purchases a $300,000 home with a $60,000 down payment. What is the loan-to-value (LTV) ratio?

7. A mortgage lender offers a salesperson $200 for every client referred. Under RESPA this is:

8. After the Financing & Appraisal Deadline, the buyer's loan fails to fund and either party cancels. Under the REPC, the seller's remedy is:

9. A conventional loan that exceeds the conforming loan limits set by the FHFA is called a:

10. Which document is recorded in the county records and makes the property collateral for a loan?

11. Under TRID, the borrower must receive the Closing Disclosure at least how long before loan closing?

12. A lender approves a $276,000 loan and the buyer wants to keep an 80% LTV. What is the maximum purchase price?

13. Using an amortization factor of 4.77415 per $1,000 (30 years at 4%), what is the monthly principal and interest payment on a $250,000 loan?

14. A home sells for $389,000. The seller pays a 5% commission, a $212,600 mortgage payoff, $1,200 attorney fee, $1,950 transfer tax and $600 in other costs. What are the seller's net proceeds?

15. An agent tells a buyer he will show homes only if the buyer uses the agent's brother as mortgage broker. This is an illegal:

16. The mortgage clause that allows the lender to declare the entire balance due immediately upon the borrower's default is the:

17. A zero-down-payment government loan program aimed at low- and moderate-income buyers in eligible rural areas is offered through the:

18. Which federal law requires disclosure of the true cost of credit, including APR?

19. A property has a first mortgage (recorded 2015), a judgment lien (2018), a mechanic's lien (2020) and unpaid property taxes. Which is paid FIRST from sale proceeds?

20. A loan whose payments are not large enough to pay it off by the end of the term, leaving a large final payment, is a:

21. Settlement under a Utah REPC occurs on Tuesday, July 28, 2026. Loan funding and recording must be completed no later than:

22. In a mortgage, the borrower who pledges the property as security is the:

23. A home sells for $615,000. The seller pays a 5.5% commission, a $348,200 loan payoff, a $2,150 owner's title policy, a $475 escrow fee, and a $1,640 tax proration debit. The seller's net proceeds are:

24. Buyer debits: $389,000 price, $525 escrow fee, $3,875 loan costs. Buyer credits: $4,000 earnest money, $311,200 new loan, $2,500 seller concession, $1,137 tax proration. Cash due from the buyer at closing is:

25. A mortgage broker offers a Utah agent $500 for each client referred. The agent may:

Sources

1. Adding a new financing contingency to an existing sales contract is done by a(n) ____, while changing the existing closing date is done by a(n) ____.