Exam topics · Tennessee
Loan types, the instruments that secure them, and the federal disclosure rules. Vocabulary-dense and easy to confuse under time pressure.
Financing questions stack unfamiliar vocabulary three layers deep. Once you can say which document does what and who is protected by which federal act, most of the section becomes straightforward.
The promissory note is the promise to repay — the debt itself. The security instrument pledges the property as collateral. Tennessee is a deed-of-trust state: title is held by a trustee for the lender until the debt is satisfied, which permits non-judicial foreclosure.
Conventional loans are not government-backed and carry private mortgage insurance below the lender's equity threshold. FHA loans are insured by the government and carry mortgage insurance premiums. VA loans are guaranteed for eligible veterans and typically require no down payment.
Property tax liens take priority over other liens regardless of when they were recorded. Otherwise, priority generally follows recording order, which is why recording promptly matters.
The Truth in Lending Act requires disclosure of the annual percentage rate and total cost of credit. RESPA governs settlement services and prohibits kickbacks for referrals. The Equal Credit Opportunity Act prohibits discrimination in lending on protected bases.
The note is the debt. The deed of trust is the collateral pledge that secures it.
Property tax liens jump ahead of everything.
FHA insures the lender against loss; VA guarantees a portion of the loan for eligible veterans.
Tennessee uses deeds of trust. A trustee holds title for the lender's benefit until the debt is paid, which allows the non-judicial foreclosure process the exam asks about.
The promissory note is the borrower's written promise to repay the debt. The deed of trust is the security instrument that pledges the property as collateral for that promise.
Property tax liens generally take priority over all other liens regardless of recording date. Other liens usually rank in the order they were recorded.
Twenty free questions with an instant score, or drill this topic inside the academy.