Delaware Finance
Practice Questions & Answers (2026)
Finance questions on the Delaware real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Delaware Real Estate Commission tests both the mechanics of real estate financing and the regulatory framework — particularly RESPA, TILA (Truth in Lending), and the TRID rules that govern loan disclosures. Delaware candidates often lose points on financing questions because they understand the concept but miss the specific numerical thresholds or disclosure timing requirements that appear on the DE exam. Pay particular attention to ARM vs. fixed-rate mortgage distinctions, the calculation of LTV ratios, and what information must appear in specific disclosure documents.
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Delaware Finance — Practice Questions & Answers
174 questions on Finance from the Delaware real estate question bank. First 10 are free — sign up to unlock all 174.
Q1. Which type of mortgage requires the borrower to pay only interest for a specified period, after which principal payments begin?
Explanation
An interest-only mortgage requires the borrower to pay only the accrued interest during the initial period. At the end of this period, the borrower must begin paying principal and interest or refinance the loan.
Q2. The Truth in Lending Act (TILA) requires lenders to disclose the annual percentage rate (APR). The APR is:
Explanation
The APR represents the true cost of credit as a yearly rate, including the interest rate plus fees, points, and other loan costs. It allows borrowers to compare loan offers on an equal basis.
Q3. A Delaware property is appraised at $310,000. The lender will loan 80% of appraised value. What is the maximum loan amount?
Explanation
Maximum loan = $310,000 × 80% = $310,000 × 0.80 = $248,000.
Q4. A VA loan is available to eligible veterans and is unique because it:
Explanation
VA loans are guaranteed by the Department of Veterans Affairs and offer eligible veterans the ability to purchase a home with no down payment and without private mortgage insurance (PMI), although a funding fee is typically charged.
Q5. Amortization in real estate finance refers to:
Explanation
Amortization is the process of paying off a loan through regular scheduled payments that include both principal and interest. Early payments are mostly interest; over time, a greater portion applies to principal.
Q6. What is the purpose of a mortgage in a real estate transaction?
Explanation
A mortgage is a security instrument that pledges real property as collateral for a loan. If the borrower defaults, the lender can foreclose on the property.
Q7. Which type of mortgage loan is insured by the Federal Housing Administration?
Explanation
FHA loans are insured by the Federal Housing Administration, allowing borrowers to qualify with lower down payments and credit scores than conventional loans typically require.
Q8. What does the annual percentage rate (APR) on a mortgage loan represent?
Explanation
The APR reflects the total cost of a loan on an annual basis, including the interest rate and certain fees such as origination points and mortgage insurance, providing a more complete cost comparison.
Q9. A Delaware buyer obtains a 30-year fixed-rate mortgage at 7% interest for $250,000. The 'fixed-rate' means:
Explanation
A fixed-rate mortgage maintains the same interest rate for the entire loan term, providing payment stability. Monthly payments can still change if property taxes or insurance held in escrow change.
Q10. Private mortgage insurance (PMI) is typically required when a conventional loan has a down payment of less than:
Explanation
Conventional lenders typically require PMI when the borrower's down payment is less than 20% of the purchase price, protecting the lender against default risk.
Q11. In Delaware, a deed of trust differs from a mortgage primarily because:
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