Nevada Finance
Practice Questions & Answers (2026)
Finance questions on the Nevada real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The Nevada Real Estate Division 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. Nevada 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 NV 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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Nevada Finance — Practice Questions & Answers
125 questions on Finance from the Nevada real estate question bank. First 10 are free — sign up to unlock all 125.
Q1. A VA loan is available to eligible veterans and offers:
Explanation
VA loans are guaranteed by the Department of Veterans Affairs and offer eligible veterans 100% financing (no down payment) with no PMI requirement, making homeownership more accessible.
Q2. In Nevada, a deed of trust differs from a mortgage primarily because:
Explanation
A deed of trust involves three parties — the trustor (borrower), the trustee (neutral third party), and the beneficiary (lender). Nevada primarily uses deeds of trust, which allow for non-judicial (trustee's sale) foreclosure.
Q3. A buyer's debt-to-income (DTI) ratio of 43% means:
Explanation
DTI ratio measures monthly debt payments as a percentage of gross monthly income. A 43% DTI means 43 cents of every dollar earned goes toward debt payments, which is the maximum for many conventional loan programs.
Q4. A balloon mortgage requires:
Explanation
A balloon mortgage features regular payments (often interest-only or partially amortizing) for a set period, after which the remaining balance (balloon payment) is due in full.
Q5. The annual percentage rate (APR) on a mortgage is higher than the stated interest rate because APR includes:
Explanation
APR reflects the true cost of borrowing by incorporating the interest rate plus certain fees (origination fees, discount points, etc.), giving borrowers a more accurate basis for comparing loan offers.
Q6. What does the term 'amortization' mean in real estate finance?
Explanation
Amortization is the process of paying off a loan over time through regular payments that include both principal and interest. In early payments, most of the payment covers interest; over time, more goes toward principal.
Q7. A Nevada home buyer obtains a 30-year fixed mortgage at 7% for $400,000. What is the approximate monthly principal and interest payment?
Explanation
Using the mortgage factor for a 30-year loan at 7% (approximately $6.653 per $1,000 borrowed): $400,000 ÷ 1,000 × 6.653 ≈ $2,661/month for principal and interest.
Q8. Private Mortgage Insurance (PMI) is typically required when the borrower's down payment is less than:
Explanation
Conventional lenders typically require PMI when the borrower's down payment is less than 20%, as the lender's risk is higher. PMI protects the lender (not the borrower) if the borrower defaults.
Q9. A loan-to-value (LTV) ratio of 80% on a $350,000 property means the loan amount is:
Explanation
LTV = Loan Amount ÷ Property Value. An 80% LTV on a $350,000 property = $350,000 × 0.80 = $280,000 loan, with a $70,000 (20%) down payment.
Q10. In Nevada, which type of loan allows non-judicial (trustee's sale) foreclosure?
Explanation
Nevada primarily uses deeds of trust, which allow the trustee to conduct a non-judicial foreclosure (trustee's sale) without court involvement. This process is generally faster than judicial foreclosure used with traditional mortgages.
Q11. The Truth-in-Lending Act (TILA) requires lenders to disclose the:
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