Retake Recovery Practice Set Preview

Use the diagnostic categories on your PSI score report to choose the first weak portion, then narrow by official area. A retake set should repair the reason for each miss rather than replay the same mixed mock. Answer this 9-question public preview here, then continue the complete experience in Pass Georgia.

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Mixed recovery Contracts Agency Practice of Real Estate Property Ownership Financing Valuation Calculations Disclosures Transfer of Title Land Use Property Management State Laws and Rules Real Estate Practice in Georgia Finance and Closing

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1 / 9Study mode: Financing

An ARM starts at 4 percent with a 2 percentage point periodic cap and a 6 percentage point lifetime cap. At the first adjustment, the rate can rise no higher than:

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

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1. An ARM starts at 4 percent with a 2 percentage point periodic cap and a 6 percentage point lifetime cap. At the first adjustment, the rate can rise no higher than:Financing. Open choices and explanation.

A.4 percent
B.6 percent
C.10 percent
D.12 percent

Answer B: 6 percent

The periodic cap limits any single adjustment, so the first change cannot exceed 2 percentage points: 4 plus 2 gives 6 percent. The lifetime cap sets the ceiling across the whole loan, here 4 plus 6, or 10 percent, which cannot be reached in one step.

Why each choice works or fails

A. 4 percent assumes the rate cannot change at the first adjustment.
B. The 2 point periodic cap allows 4 plus 2, or 6 percent.
C. 10 percent is the lifetime ceiling, not the limit on one step.
D. 12 percent adds both caps to the start rate.

Rule to remember: The periodic cap limits each adjustment; the lifetime cap limits the total rise over the loan.

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2. 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.

A.20%
B.25%
C.80%
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

$250,000 - $50,000 = $200,000 loan
$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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3. A buyer purchases a $225,000 home with a $180,000 loan. What does one discount point cost?Financing. Open choices and explanation.

A.$180
B.$18,000
C.$2,250
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

One point = 1% of the loan
$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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4. Which loan type is insured by the federal government to protect the lender against borrower default?Financing. Open choices and explanation.

A.FHA
B.Conventional with PMI
C.VA
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 with limited savings but steady income is MOST likely drawn to FHA financing because it:Financing. Open choices and explanation.

A.Accepts a down payment as low as 3.5 percent
B.Skips the appraisal to speed up the closing
C.Charges no mortgage insurance premiums at all
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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6. A clause allowing the lender to demand the full balance if the property is sold is:Financing. Open choices and explanation.

A.A prepayment clause
B.A subordination clause
C.A defeasance clause
D.A due-on-sale clause

Answer D: A due-on-sale clause

A due-on-sale, or alienation, clause allows the lender to require repayment when the borrower transfers the property. It can prevent an assumption without consent, but federal law protects certain transfers from enforcement. In Georgia, look for the clause in the security deed.

Why each choice works or fails

A. A prepayment clause covers paying the loan off early.
B. Subordination changes a lien's priority, not its due date.
C. Defeasance releases the security instrument when the debt is paid.
D. A due-on-sale clause accelerates the debt when title transfers.

Rule to remember: Due-on-sale may let a lender accelerate after a transfer, subject to legal exceptions. Defeasance releases the security when the debt is paid.

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7. Under RESPA, a brokerage that owns part of a title agency may refer buyers to that agency if it:Financing. Open choices and explanation.

A.Requires every buyer it represents to use the agency
B.Discloses the ownership in writing and lets buyers choose
C.Keeps its ownership share confidential from buyers
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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8. A buyer putting 25 percent down on a conventional loan will MOST likely:Financing. Open choices and explanation.

A.Pay mortgage insurance for the life of the loan
B.Avoid the need for private mortgage insurance
C.Pay a funding fee instead of mortgage insurance
D.Pay an upfront mortgage insurance premium at closing

Answer B: Avoid the need for private mortgage insurance

Private mortgage insurance protects the lender when the borrower's equity cushion is thin, and conventional lenders typically require it when the down payment is under 20 percent. Twenty-five percent down produces a 75 percent loan-to-value, below the usual 80 percent line, so mortgage insurance is normally not required.

Why each choice works or fails

A. Life-of-loan premiums are an FHA feature; conventional PMI can be canceled and ends automatically under the Homeowners Protection Act.
B. A 75 percent LTV is below the 80 percent point where PMI is usually required.
C. A funding fee is a VA loan charge, not part of a conventional loan.
D. A required upfront mortgage insurance premium is an FHA charge; at 75 percent LTV a conventional borrower normally pays no mortgage insurance at all.

Rule to remember: Conventional loans usually need private mortgage insurance only when the loan exceeds 80% of value.

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9. The appraisal in a residential loan transaction primarily serves to:Financing. Open choices and explanation.

A.Guarantee the overall physical condition of the home
B.Confirm the property adequately secures the loan
C.Determine the property tax assessment value
D.Establish the price the buyer must pay

Answer B: Confirm the property adequately secures the loan

The lender orders the appraisal to confirm the property is worth enough to secure the loan if the borrower defaults. Price is set by the buyer and seller, condition is the home inspector's subject, and assessed value is the county's figure, so the appraisal decides none of them.

Why each choice works or fails

A. Physical condition is the home inspector's job, and an appraisal guarantees nothing.
B. The lender orders the appraisal to confirm the property supports the loan amount.
C. The county tax assessor sets assessed value for property taxes.
D. The buyer and seller set the price in their contract; the appraisal only tests it.

Rule to remember: The lender's appraisal confirms the collateral is worth enough to secure the loan.

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What does this assessment cover?

PSI says a failing score report includes diagnostic strengths and weaknesses by examination type. Translate that evidence into the closest published area, then gather a larger fresh sample before the next attempt.

Question coverage in this assessment
Official content area	Published weight	Questions here	Complete lesson
Financing	10% of the national portion	9	Study Financing

The Georgia-specific distinction

Keep the national and Georgia subtotals separate. If Georgia is weak, split the work again into Laws and Rules, Georgia Practice, and Finance and Closing rather than reading one general state summary.

Worked result example

If the report points to Georgia and review notes show national-instinct errors, build a Georgia-only set, read the Georgia distinction after each item, and follow with a fresh 52-question simulation.

Common exam traps

Retaking a full practice exam before repairing anything.
Studying only the lowest raw score without considering sample size.
Memorizing questions from the failed attempt.
Booking again because the average improved while one group stayed weak.

Ready to move on?

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

Recommended next lesson

Use the complete retake recovery plan. 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: Use the complete retake recovery plan.

Is the assessment free?

Yes. This 9-question preview has no email gate, account requirement, or card. The complete assessment, saved mastery, spaced review, and adaptive recommendations are in Pass Georgia.