Kansas Finance
Practice Questions & Answers (2026)
Finance questions on the Kansas real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Kansas 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. Kansas 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 KS 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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Kansas Finance — Practice Questions & Answers
125 questions on Finance from the Kansas real estate question bank. First 10 are free — sign up to unlock all 125.
Q1. A mortgage in which the interest rate can change periodically based on an index is called a(n):
Explanation
An adjustable-rate mortgage (ARM) has an interest rate that adjusts periodically based on a financial index, which can cause monthly payments to increase or decrease.
Q2. In Kansas, what federal law requires lenders to disclose the annual percentage rate (APR) to borrowers?
Explanation
The Truth in Lending Act (TILA) requires lenders to disclose the APR and total cost of credit so borrowers can make informed decisions.
Q3. What is the loan-to-value (LTV) ratio of a property appraised at $200,000 with a $160,000 mortgage?
Explanation
LTV = Loan ÷ Value × 100 = $160,000 ÷ $200,000 × 100 = 80%. An 80% LTV typically avoids the requirement for private mortgage insurance (PMI).
Q4. Which type of loan is guaranteed by the U.S. Department of Veterans Affairs?
Explanation
VA loans are guaranteed by the U.S. Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and surviving spouses.
Q5. A 'due-on-sale' clause in a mortgage requires:
Explanation
A due-on-sale clause (also called an acceleration clause) requires the full outstanding loan balance to be paid when the property is sold or title is transferred.
Q6. What is the purpose of private mortgage insurance (PMI)?
Explanation
PMI protects the lender — not the borrower — against loss if the borrower defaults when the down payment is less than 20% of the purchase price.
Q7. Under RESPA, a lender must provide the borrower with a Loan Estimate within how many days of receiving a loan application?
Explanation
RESPA requires lenders to provide the Loan Estimate to the borrower within 3 business days of receiving a completed loan application.
Q8. A balloon mortgage requires:
Explanation
A balloon mortgage typically has lower monthly payments based on a long amortization schedule, but requires the remaining balance to be paid in full at the end of a shorter term.
Q9. The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating against borrowers based on:
Explanation
ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
Q10. Which federal program insures mortgages for borrowers who meet low-to-moderate income requirements in rural areas?
Explanation
The USDA Rural Development loan program guarantees mortgages for eligible borrowers in rural areas, often with no down payment required.
Q11. A buyer obtains a $250,000 mortgage at 6% annual interest amortized over 30 years. What is the approximate monthly payment (principal and interest)?
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