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Financing Practice Questions Preview

This focused set tests Financing at salesperson level. Answer first, then use the rule and explanation to diagnose why each option wins or fails. Answer this 5-question public preview here, then continue the complete experience in Pass Georgia.

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

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1 / 5Study mode: Financing

A buyer purchases a $225,000 home with a $180,000 loan. What does one discount point cost?

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34% of the real exam is Georgia law. 52 of 152 questions.

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1. A buyer purchases a $225,000 home with a $180,000 loan. What does one discount point cost?Financing. Open choices and explanation.
  1. A.$180
  2. B.$18,000
  3. C.$2,250
  4. D.$1,800

Answer D: $1,800

A discount point is 1 percent of the loan amount, paid at closing to lower the interest rate. The price is a distractor: 1 percent of the $180,000 loan is $1,800.

Why each choice works or fails

  • A. $180 treats a point as 0.1 percent of the loan.
  • B. $18,000 treats a point as 10 percent.
  • C. $2,250 is 1 percent of the price, not the loan.
  • D. Correct. 1% of the $180,000 loan is $1,800.

Work it through

  1. One point = 1% of the loan
  2. $180,000 x 0.01 = $1,800

Rule to remember: A point is 1% of the loan, never 1% of the price.

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2. Under RESPA, a brokerage that owns part of a title agency may refer buyers to that agency if it:Financing. Open choices and explanation.
  1. A.Requires every buyer it represents to use the agency
  2. B.Discloses the ownership in writing and lets buyers choose
  3. C.Keeps its ownership share confidential from buyers
  4. D.Accepts a referral fee from the agency for each buyer

Answer B: Discloses the ownership in writing and lets buyers choose

RESPA permits an affiliated business arrangement only when three conditions are met: the referral comes with a written disclosure of the relationship and estimated charges, the consumer is not required to use the affiliate, and the brokerage receives nothing beyond a return on its ownership interest. Failing any one condition exposes the referral to Section 8.

Why each choice works or fails

  • A. Requiring use of the affiliate defeats the exemption.
  • B. Written disclosure plus a genuine free choice meets the core conditions.
  • C. Hiding the ownership interest violates the disclosure requirement.
  • D. A per-referral fee is a Section 8 kickback; only a return on ownership is allowed.

Rule to remember: An affiliated business arrangement is lawful only with written disclosure, free choice, and no referral pay.

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3. A buyer with limited savings but steady income is MOST likely drawn to FHA financing because it:Financing. Open choices and explanation.
  1. A.Accepts a down payment as low as 3.5 percent
  2. B.Skips the appraisal to speed up the closing
  3. C.Charges no mortgage insurance premiums at all
  4. D.Approves applicants without a credit review

Answer A: Accepts a down payment as low as 3.5 percent

HUD states that FHA-insured loans allow a down payment as low as 3.5 percent, and gift funds may cover it. That low entry cost is the program's main draw for a buyer with steady income but little savings. The trade-off is FHA mortgage insurance premiums, so a licensee should compare total monthly cost, not the down payment alone.

Why each choice works or fails

  • A. FHA's low 3.5 percent minimum down payment is its main attraction.
  • B. FHA requires an appraisal performed to FHA standards.
  • C. FHA loans carry both upfront and annual mortgage insurance premiums.
  • D. The lender still underwrites every applicant's credit and income.

Rule to remember: FHA insures the loan, which lets lenders accept a 3.5% down payment in exchange for mortgage insurance premiums.

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4. Which loan type is insured by the federal government to protect the lender against borrower default?Financing. Open choices and explanation.
  1. A.FHA
  2. B.Conventional with PMI
  3. C.VA
  4. D.Fannie Mae conforming

Answer A: FHA

FHA, part of HUD, insures the lender against loss if the borrower defaults. VA guarantees part of the loan instead, PMI is private insurance rather than federal, and Fannie Mae buys loans on the secondary market without insuring them.

Why each choice works or fails

  • A. FHA insures the loan against borrower default.
  • B. PMI insures the lender, but it is private, not federal.
  • C. VA guarantees part of the loan rather than insuring it.
  • D. Fannie Mae buys conforming loans; it does not insure them.

Rule to remember: FHA insures, VA guarantees, conventional does neither.

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5. A buyer purchases a home for $250,000, which is also its appraised value, with $50,000 down. What is the loan-to-value ratio?Financing. Open choices and explanation.
  1. A.20%
  2. B.25%
  3. C.80%
  4. D.125%

Answer C: 80%

First find the loan: $250,000 price minus $50,000 down is $200,000. Then divide loan by value: $200,000 / $250,000 = 80 percent.

Why each choice works or fails

  • A. 20% is the down payment divided by the price, the buyer's equity share.
  • B. 25% divides the down payment by the loan amount.
  • C. Correct. $200,000 / $250,000 = 80%.
  • D. 125% inverts the ratio, dividing value by loan.

Work it through

  1. $250,000 - $50,000 = $200,000 loan
  2. $200,000 / $250,000 = 0.80, so 80%

Rule to remember: LTV is the loan amount divided by the property value.

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What does this assessment cover?

Loan terminology, underwriting, notes and clauses, conventional and government programs, amortization, ARMs, owner financing, reverse mortgages, construction lending, RESPA, TILA, TRID, and ECOA.
Question coverage in this assessment
Official content areaPublished weightQuestions hereComplete lesson
Financing10% of the national portion5Study Financing

The Georgia-specific distinction

National financing principles still apply in Georgia, but Georgia commonly secures real estate debt with a security deed. Separate the debt in the note from the instrument securing it.

Worked result example

If a buyer pays two points on a $240,000 loan, use the loan as the base: 0.02 times $240,000. The purchase price is extra information unless another part of the question needs it.

Common exam traps

  • Calculating points from sale price.
  • Confusing an acceleration clause with an alienation clause.
  • Treating FHA as a direct lender.
  • Assuming disclosure cures a RESPA kickback.

Ready to move on?

  1. Score the set before opening notes.
  2. Explain the winning rule without repeating the answer choice.
  3. Classify every miss as knowledge, distinction, wording, math setup, or timing.
  4. Repair the weakest official area, then answer a fresh set on another day.
  5. Move on only when the result is stable and guesses are being marked as gaps.

Recommended next lesson

Open the complete lesson hub. Use the result above to choose the first lesson or drill rather than following a generic order.

Assessment integrity

The questions are original and mapped to the current PSI outline. This preview introduces the assessment; the complete version is in Pass Georgia. PSI says practice exams help candidates become familiar with general question types, but they do not replace education and a good practice score does not guarantee an examination outcome. This page reports evidence, not a pass probability.

About this practice set

Facts checked against the current PSI Candidate Information Bulletin and GREC sources.

Are these actual PSI exam questions?

No. Every item is original, written from the current published outline and primary sources. No question is copied, recalled, reconstructed, or represented as a live PSI item.

Does this score predict whether I will pass?

No. One practice result is evidence about this question sample. Use the area breakdown, review guesses as well as misses, and confirm improvement with fresh questions on another day.

What should I do after the result?

Open the explanation for every miss and guess, restate the rule, use the linked repair lesson, then continue with the next lesson: Open the complete lesson hub.

Is the assessment free?

Yes. This 5-question preview has no email gate, account requirement, or card. The complete assessment, saved mastery, spaced review, and adaptive recommendations are in Pass Georgia.