Financing — Real Estate Salesperson — National Exam Practice Test

This Real Estate Salesperson — National Exam Financing practice set has 60 practice questions based on the official exam materials, each with an instant explanation. You need 75% on the real Real Estate Salesperson — National Exam knowledge test to pass.

Sample questions

Three questions from the Financing bank with the correct answer and an explanation. The practice quiz above draws 30 questions at random from the same bank.

1. When a borrower finances the purchase of a home, the lender requires two basic documents. One is the borrower's personal promise to repay the debt. What is that document called?

   • The promissory note — Correct answer
   • The mortgage
   • The deed of trust
   • The title insurance policy

   Explanation: The promissory note (the note) is the borrower's written promise to pay the debt; it is the evidence of the debt itself and creates the borrower's personal liability. The security instrument is a separate document that pledges the property as collateral. English term — Promissory note（本票/借据）: a written promise to repay a debt according to stated terms.

   Handbook: Financing — Mortgage Instruments

2. In a real estate loan, which document does the borrower sign to pledge the real property as security for the debt, giving the lender the right to force a sale if the borrower defaults?

   • The security instrument (mortgage or deed of trust) — Correct answer
   • The promissory note
   • The estoppel certificate
   • The loan estimate disclosure

   Explanation: The security instrument (a mortgage or a deed of trust) pledges the property as collateral and creates the lender's lien; it is separate from the note, which is the promise to pay. Together the note + security instrument make up the loan. English term — Security instrument（担保文件）: the document that pledges property as collateral for a debt.

   Handbook: Financing — Mortgage Instruments

3. A borrower pledges real property as security for a loan but keeps possession and use of the property while making payments. What is this practice of pledging property as collateral without giving up possession called?

   • Hypothecation — Correct answer
   • Subrogation
   • Novation
   • Escheat

   Explanation: Hypothecation is pledging property as security for a debt while retaining possession and use of it — exactly what a mortgage borrower does. English term — Hypothecation（不移转占有的抵押）: pledging property as collateral while keeping possession of it.

   Handbook: Financing — Hypothecation