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PSI National Exam Guide Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What does the term "real property" refer to?✔✔Real property refers to land and anything permanently attached to it, such as buildings or structures.
What is the primary purpose of a property appraisal?✔✔The primary purpose of a property appraisal is to determine the market value of a property based on its condition, location, and comparable properties.
What is the difference between a lien and a deed of trust?✔✔A lien is a legal claim on a property as security for a debt, while a deed of trust involves a third-party trustee holding the property until the loan is paid off.
What is the role of the escrow agent in a real estate transaction?✔✔The escrow agent is responsible for holding and distributing funds and documents according to the terms of the purchase agreement, ensuring that both parties fulfill their obligations.
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What is the purpose of title insurance in a real estate transaction?✔✔Title insurance protects the buyer and lender from financial loss due to defects in the property's title, such as outstanding liens or claims of ownership.
What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage?✔✔A fixed-rate mortgage has an interest rate that remains the same throughout the life of the loan, while an adjustable-rate mortgage has an interest rate that can change over time based on market conditions.
What is the significance of a closing disclosure in a real estate transaction?✔✔A closing disclosure is a document that outlines all costs associated with the transaction, including the loan amount, interest rate, and closing costs, and it is provided to the buyer before the closing.
What is a "contingency" in a real estate contract?✔✔A contingency is a condition that must be met for the transaction to proceed, such as a satisfactory home inspection or the buyer securing financing.
What is the primary function of a mortgage broker? 2 / 3
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✔✔A mortgage broker acts as an intermediary between the borrower and the lender, helping the borrower find the best mortgage terms and rates available.
What is the purpose of a deed in a real estate transaction?✔✔A deed is a legal document that transfers ownership of property from one party to another, outlining the rights of the buyer and seller.
What is "amortization" in relation to a mortgage loan?✔✔Amortization is the process of gradually paying off the loan balance through regular payments, which include both principal and interest.
What does the term "equity" in real estate refer to?✔✔Equity refers to the difference between the current market value of the property and the amount the homeowner owes on any mortgages or loans.
What is the role of a property inspector in a real estate transaction?✔✔A property inspector evaluates the condition of the property, identifying any potential issues or necessary repairs before the purchase.
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