Mississippi Finance
Practice Questions & Answers (2026)
Finance questions on the Mississippi real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Mississippi Real Estate Commission (MREC) 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. Mississippi 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 MS 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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Mississippi Finance — Practice Questions & Answers
141 questions on Finance from the Mississippi real estate question bank. First 10 are free — sign up to unlock all 141.
Q1. A Mississippi buyer borrows $200,000 at 7.5% annual interest. What is the first month's interest charge?
Explanation
Monthly interest = $200,000 × (7.5% ÷ 12) = $200,000 × 0.00625 = $1,250.
Q2. A 'due-on-sale' clause in a mortgage requires:
Explanation
A due-on-sale (alienation) clause requires the entire outstanding mortgage balance to be paid upon the sale or transfer of the property. It prevents loan assumption without lender approval.
Q3. Which type of mortgage allows interest-only payments for an initial period, after which the borrower pays principal and interest?
Explanation
An interest-only mortgage requires payments covering only the interest for an initial period (often 5–10 years). After this period, the loan resets and the borrower must pay principal and interest, typically causing payment increases.
Q4. Under RESPA, lenders are required to provide borrowers with the 'Special Information Booklet' when the loan application involves:
Explanation
RESPA requires lenders to give borrowers the HUD Special Information Booklet (Your home loan toolkit) within 3 business days of a loan application for purchase of 1–4 family residential property.
Q5. The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating based on all of the following EXCEPT:
Explanation
ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or public assistance income. Credit score is not a protected characteristic — lenders may use creditworthiness factors.
Q6. Which federal law requires lenders to give borrowers a Loan Estimate within 3 business days of a loan application?
Explanation
The TILA-RESPA Integrated Disclosure (TRID) rule requires lenders to provide a Loan Estimate within 3 business days of receiving a completed loan application.
Q7. A conventional loan is best described as a mortgage that:
Explanation
A conventional loan is a mortgage not insured or guaranteed by a government agency (FHA, VA, or USDA). It is funded by private lenders and may or may not conform to Fannie Mae/Freddie Mac guidelines.
Q8. The loan-to-value (LTV) ratio on a property appraised at $250,000 with a $200,000 loan is:
Explanation
LTV = Loan amount ÷ Appraised value = $200,000 ÷ $250,000 = 0.80 = 80%.
Q9. Private mortgage insurance (PMI) is typically required on conventional loans when the down payment is less than:
Explanation
Lenders typically require PMI on conventional loans when the buyer's down payment is less than 20% of the purchase price, protecting the lender against default risk.
Q10. A Mississippi buyer obtains a 30-year mortgage of $180,000 at 6.5% interest. The monthly payment factor is $6.32 per $1,000 borrowed. What is the monthly principal and interest payment?
Explanation
Monthly payment = ($180,000 ÷ $1,000) × $6.32 = 180 × $6.32 = $1,137.60.
Q11. An FHA loan differs from a conventional loan primarily because:
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