Chapter 4 of 1410% of exam
Financing
Financing enables most purchases, so licensees must know loan types and lending laws. Terms directly affect a buyer's ability to close.
Types of Loans
Conventional loans carry no government backing, while FHA loans are insured and VA loans are guaranteed by the government, allowing lower down payments. Sellers may provide purchase-money financing directly to buyers. Adjustable-rate and fixed-rate structures affect how payments change over time.
Lending Laws
The Truth in Lending Act (Regulation Z) requires APR and finance-charge disclosure, and RESPA governs settlement disclosures and prohibits kickbacks. The Equal Credit Opportunity Act prohibits discrimination in any credit transaction. These laws protect borrowers and standardize disclosures.