Notes on Texas Pre-License Real Estate Finance Study Guide

Overview

• This study guide is designed to help prepare for both the Aceable course exam and the state real estate exam.
• It includes reviews of important concepts, key terms, math equations, study schedules, and practice tests.

Key Topics Covered

The Nature and Cycle of Real Estate Finance

• History and evolution of real estate finance, including the impact of the Great Depression and the creation of the Federal Housing Administration in 1934.
• Concepts like pre-qualification and pre-approval for loans.
• Roles of mortgage brokers and bankers.

Mortgage Lending Activities

• Understanding collateral, hypothecation, and leverage in real estate finance.
• Differences between primary and secondary mortgage markets.
• Roles of credit unions, commercial banks, and other lending institutions.

Government Influence

• Overview of U.S. Department of Housing & Urban Development programs.
• FHA loans and their requirements.
• VA Loan Guaranty Program.
• Role of the Federal Reserve in monetary policy.

Mortgage Types and Issues

• Differences between conventional and government-backed loans.
• Adjustable-rate mortgages, balloon mortgages, reverse mortgages, etc.
• Private Mortgage Insurance (PMI) and Mortgage Insurance Premium (MIP) for FHA loans.

Lender Loan Process

• Underwriting process and borrower qualifications.
• Review of Uniform Residential Loan Application and associated verification forms.

Defaults and Foreclosures

• Understanding loan defaults and foreclosure processes.
• Alternatives to foreclosure, like short sales and deeds in lieu of foreclosure.

Real Estate Cycles

• Real estate market cycles: recovery, expansion, hyper-supply, recession.
• Impacts of economic factors like inflation, GDP, and unemployment on real estate.

Financial Institutions

• Role of commercial banks, insurance companies, credit unions, and pension funds in real estate finance.
• Use of real estate investment trusts (REITs) and bonds.

Legal and Regulatory Framework

• Key legislation affecting real estate finance, including RESPA, TILA, ECOA, and SAFE Act.
• Importance of title insurance and understanding clear title.

Additional Resources

• Suggested study schedules for different paces.
• Summary outlines of the Texas Real Estate Salesperson Examination content.

Practice and Review

• Practice tests and mastery tracking are highly recommended for exam preparation.

This guide serves as a comprehensive resource for understanding and navigating the complexities of real estate finance in preparation for licensure exams.