Financing

Financing — NY Real Estate Salesperson Exam Understanding financing is critical because it appears in roughly 9% of exam questions and overlaps heavily with the math section (~10%). Together, these two topics can account for nearly one-fifth of your total score — getting the concepts and calculations right here is non-negotiable. --- ## Why Financing Matters on the NY Exam The exam tests not just vocabulary but your ability to apply financing concepts to realistic scenarios: calculating mortgage recording tax, identifying the correct loan type, and understanding how closing works in New York's attorney-driven system. Expect both conceptual questions and straightforward math problems. --- ## Core Mortgage Concepts ### The Note + Mortgage Relationship In New York, a mortgage loan actually involves two legal documents: - The promissory note — the borrower's personal promise to repay the debt. This is the "IOU." - The mortgage (or deed of trust in some states, but NY uses a mortgage) — the security instrument that pledges the real property as collateral. New York is a lien theory state, meaning the borrower retains title to the property; the lender holds only a lien (a claim) against it. This contrasts with title theory states where the lender holds actual title. ### Foreclosure in New York If a borrower defaults, lenders must use judicial foreclosure — a court-supervised process. This is notably slow: 2–4 years in New York. This long timeline is a frequent exam fact and distinguishes NY from states with faster non-judicial (power of sale) foreclosure. --- ## Loan Types You Must Know | Loan Type | Key Feature | NY Relevance | |---|---|---| | Conventional | Not government-backed; private lender | Most…