Texas Real Estate State Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Texas Real Estate State Exam with comprehensive study materials. Engage in multiple choice questions and gain insights with in-depth explanations and examples. Ace your exam confidently!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What type of loan requires occupancy and is assumable, while insuring the loan with MIP (mortgage insurance premium)?

FHA Loan
VA Loan
Blanket Loan
Package Loan

The correct answer is: FHA Loan

The correct choice is indeed an FHA Loan. FHA loans are specifically designed to help lower-income and first-time homebuyers obtain financing to purchase a home. One of the key features of an FHA loan is that it requires the borrower to occupy the property as their primary residence. This occupancy requirement ensures that the loans are helping to promote homeownership rather than investment. Additionally, FHA loans are assumable, meaning that if a borrower decides to sell the home, the buyer can take over the existing mortgage under its current terms, subject to the lender's approval. This feature can make an FHA loan particularly attractive to potential homebuyers, as they can take advantage of the existing loan's terms even if market conditions have changed. Mortgage Insurance Premium (MIP) is another distinctive characteristic of FHA loans. Since these loans are often extended to borrowers with lower credit scores and smaller down payments, the MIP provides insurance to the lender against the risk of default, which allows the loan to be more accessible. In contrast, VA loans are specifically for veterans and do not require mortgage insurance, while blanket and package loans serve different purposes in real estate financing and do not carry the same occupancy requirements or mortgage insurance aspects.