b. Secured debt is backed by collateral, while unsecured is a personal promise.
c. Secured debt has fees, while unsecured debt does not.
d. Secured debt is interest free, while unsecured debt is not.
2. A promissory note for a real estate transaction must be written.
3. The buyer is the _____and the seller is the _____.
a. grantee, grantor
b. grantor, grantee
c. mortgagor, mortgagee
d. mortgagee, grantor
4. Title theory views the lender as the legal owner of the property.
5. The document that transfers the legal title to the trustee is known as the deed of reconveyance.
6. The debt service consists of:
a. monthly interest + monthly principal
b. monthly expenses + monthly interest
c. annual interest + monthly expenses
d. annual expenses + monthly principal
7. The lender's effective yield is the market interest rate.
8. It is best to pay points if you are planning on moving from the property within five years of the purchase.
Answers: 1. B, 2. T, 3. A, 4.T, 5.F, 6.A, 7.F, 8. F