California Real Estate Practice Exam

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

Master the California Real Estate Exam with our comprehensive practice quiz. Get expert tips, detailed content review, and insider strategies to pass on your first try.

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.

A loan that does not qualify to be purchased by the federal secondary mortgage market is referred to as what?

Prime loan
Subprime loan
Jumbo loan
Government-insured loan

The correct answer is: Subprime loan

A Prime loan is a mortgage loan that has a lower interest rate and is typically given to borrowers with a high credit score. This type of loan is considered to be less risky for lenders. A Jumbo loan is a type of mortgage loan that exceeds the conforming loan limit set by the Federal Housing Finance Agency. These loans are often used for expensive properties and come with higher interest rates. A Government-insured loan is a loan that is backed by a government agency, such as the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA). These loans have less stringent requirements for qualification and are insured against default, making them less risky for lenders. Therefore, the correct answer is B Subprime loan, as it refers to a high-risk loan that does not meet the standards for being purchased by the federal secondary mortgage market. These loans often have higher interest rates and are given to borrowers with poor credit scores.