New Jersey Finance
Practice Questions & Answers (2026)
Finance questions on the New Jersey real estate exam cover mortgage types, loan-to-value ratios, qualifying ratios, and federal lending laws. The New Jersey 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. New Jersey 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 NJ 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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New Jersey Finance — Practice Questions & Answers
153 questions on Finance from the New Jersey real estate question bank. First 10 are free — sign up to unlock all 153.
Q1. New Jersey has a realty transfer fee (RTF) paid at closing. Who is primarily responsible for paying this fee?
Explanation
In New Jersey, the realty transfer fee (RTF) is primarily the seller's responsibility. The fee is based on the sales price and is one of the seller's closing costs.
Q2. Under RESPA, the Loan Estimate must be provided to a mortgage applicant within:
Explanation
RESPA requires lenders to provide the Loan Estimate to borrowers within 3 business days of receiving a complete loan application, giving borrowers time to compare loan terms.
Q3. A 'conventional' mortgage loan is one that is:
Explanation
A conventional loan is a mortgage that is not backed by a government agency (FHA, VA, USDA). Conventional loans may be conforming (meeting Fannie Mae/Freddie Mac guidelines) or non-conforming (jumbo loans).
Q4. A seller agrees to pay 3% of the purchase price toward the buyer's closing costs. On a $400,000 sale, this concession equals:
Explanation
Seller concession = $400,000 × 0.03 = $12,000. This amount can be applied toward the buyer's closing costs, reducing the cash the buyer needs to bring to closing.
Q5. What is the purpose of a mortgage escrow account?
Explanation
A mortgage escrow account collects a portion of property taxes and insurance premiums each month from the borrower so the lender can pay these bills when they come due, protecting the lender's collateral.
Q6. Which of the following best describes an adjustable-rate mortgage (ARM)?
Explanation
An ARM has an interest rate that adjusts at predetermined intervals based on a benchmark index (such as SOFR), meaning monthly payments can increase or decrease.
Q7. The Truth in Lending Act (TILA) requires lenders to disclose the:
Explanation
TILA requires disclosure of the APR, which includes the interest rate plus fees, giving borrowers a standardized way to compare loan costs.
Q8. A conventional loan that exceeds the conforming loan limit set by the FHFA is called a:
Explanation
A jumbo loan exceeds the FHFA conforming loan limits and is not eligible for purchase by Fannie Mae or Freddie Mac, typically requiring stricter underwriting.
Q9. Private mortgage insurance (PMI) is typically required when the borrower's down payment is:
Explanation
Lenders generally require PMI when a borrower puts down less than 20%, protecting the lender against default risk on conventional loans.
Q10. Which federal law governs real estate settlement procedures and requires the Loan Estimate and Closing Disclosure?
Explanation
The Real Estate Settlement Procedures Act (RESPA) governs settlement costs and requires the Loan Estimate (within 3 business days of application) and Closing Disclosure (3 business days before closing).
Q11. An FHA loan requires a minimum down payment of:
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