Maine Finance
Practice Questions & Answers (2026)
Finance questions on the Maine real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Maine 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. Maine 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 ME 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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Maine Finance — Practice Questions & Answers
139 questions on Finance from the Maine real estate question bank. First 10 are free — sign up to unlock all 139.
Q1. What is the primary difference between a fixed-rate and an adjustable-rate mortgage?
Explanation
A fixed-rate mortgage has a constant interest rate for the life of the loan, while an adjustable-rate mortgage (ARM) has an interest rate that can change periodically based on market indexes.
Q2. Under the Equal Credit Opportunity Act (ECOA), a lender may NOT deny a loan based on:
Explanation
ECOA prohibits lenders from discriminating in credit decisions based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
Q3. What does 'amortization' mean in the context of a mortgage loan?
Explanation
Amortization is the gradual repayment of a mortgage loan's principal through regular (typically monthly) payments that include both principal and interest.
Q4. A 'balloon mortgage' is characterized by:
Explanation
A balloon mortgage requires a large lump-sum payment of the remaining balance at the end of the loan term, which is typically shorter than a standard 30-year mortgage.
Q5. Which federal agency insures deposits in banks and savings institutions up to $250,000?
Explanation
The FDIC (Federal Deposit Insurance Corporation) insures deposits in member banks and savings institutions up to $250,000 per depositor, per institution.
Q6. In Maine, which law requires mortgage lenders to disclose the annual percentage rate (APR) to borrowers?
Explanation
The federal Truth in Lending Act (TILA) requires lenders to disclose the APR and other loan terms to borrowers before the loan is consummated.
Q7. A Maine property sells for $320,000. The buyer obtains a conventional mortgage with a 20% down payment. What is the loan amount?
Explanation
Down payment = $320,000 × 20% = $64,000. Loan amount = $320,000 − $64,000 = $256,000.
Q8. Private Mortgage Insurance (PMI) is typically required in Maine when the buyer's down payment is less than:
Explanation
PMI is generally required by conventional lenders when the borrower's down payment is less than 20% of the purchase price, protecting the lender against default risk.
Q9. The Maine State Housing Authority (MaineHousing) primarily serves:
Explanation
MaineHousing provides affordable homeownership and rental opportunities primarily to low- and moderate-income Maine residents through various loan and assistance programs.
Q10. In Maine, a 'due-on-sale' clause in a mortgage means:
Explanation
A due-on-sale clause (acceleration clause) requires the full mortgage balance to be paid off when the property is sold or title is transferred, preventing loan assumption without lender approval.
Q11. An adjustable-rate mortgage (ARM) in Maine is characterized by:
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