Maryland Finance
Practice Questions & Answers (2026)
Finance questions on the Maryland real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Maryland 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. Maryland 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 MD 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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Maryland Finance — Practice Questions & Answers
145 questions on Finance from the Maryland real estate question bank. First 10 are free — sign up to unlock all 145.
Q1. Maryland offers a down payment assistance program through the:
Explanation
The Maryland Mortgage Program (MMP), administered by the Community Development Administration (CDA), provides down payment assistance and competitive interest rates to eligible Maryland homebuyers.
Q2. What is the debt-to-income (DTI) ratio, and why is it important in mortgage underwriting?
Explanation
The DTI ratio compares total monthly debt payments to gross monthly income. Lenders use it to assess whether a borrower can manage monthly mortgage payments alongside other obligations.
Q3. Which of the following statements about FHA loans is correct?
Explanation
FHA loans require a minimum 3.5% down payment for borrowers with a credit score of 580 or higher. They require both an upfront and annual mortgage insurance premium.
Q4. A transfer tax in Maryland is typically:
Explanation
Maryland transfer taxes (both state and county) are generally shared between buyer and seller, though the allocation can be negotiated in the purchase agreement.
Q5. A mortgage note is best described as:
Explanation
A mortgage note (promissory note) is the borrower's written, unconditional promise to repay the loan according to the stated terms. The mortgage or deed of trust is the security instrument.
Q6. What is the loan-to-value (LTV) ratio on a $320,000 home with a $272,000 mortgage?
Explanation
$272,000 ÷ $320,000 = 0.85 = 85% LTV.
Q7. A Maryland buyer is obtaining an FHA loan. What is the minimum down payment required?
Explanation
FHA loans require a minimum down payment of 3.5% for borrowers with a credit score of 580 or higher.
Q8. What is the purpose of a loan discount point on a mortgage?
Explanation
Each discount point equals 1% of the loan amount and is paid upfront to reduce (buy down) the mortgage interest rate.
Q9. Under RESPA, a lender must provide a Loan Estimate to a borrower within how many business days of receiving a loan application?
Explanation
RESPA requires lenders to provide a Loan Estimate within 3 business days of receiving a completed loan application.
Q10. A conventional loan with less than 20% down typically requires:
Explanation
Conventional loans with LTV above 80% (less than 20% down) require private mortgage insurance (PMI) to protect the lender.
Q11. What type of mortgage has an interest rate that adjusts periodically based on a market index?
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