SOFE AFE Exam - Topic 4 Question 112 Discussion

Actual exam question for SOFE's AFE exam

Question #: 112
Topic #: 4

Generally, residential loans are open to prepayment at any time without penalty. To protect against a deficiency, mortgage loans should not exceed the market value of the mortgaged property and in fact are usually made for:

ANo more than 80 percent of the value

BNot less than 80 percent of the value

CNo more than 90 percent of the value

DNot less than 70 percent of the value

Show Suggested Answer

Suggested Answer: A

by Nenita at Apr 13, 2026, 01:51 AM

Limited Time Offer

25%

Off

Get Premium AFE Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Tesha

18 days ago

Totally agree, that's standard practice!

upvoted 0 times

...

Omer

23 days ago

A) No more than 80 percent of the value is correct.

upvoted 0 times

...

Hyman

1 month ago

I recall that most lenders prefer not to exceed 80 percent of the property value to mitigate risk, so I would go with A) No more than 80 percent.

upvoted 0 times

...

Tracey

1 month ago

I’m a bit confused here. I thought it was more about the lender's risk, so maybe it could be C) No more than 90 percent?

upvoted 0 times

...

Deandrea

2 months ago

This question feels familiar! I practiced one like it where the answer was also related to loan-to-value ratios. I think it’s A) No more than 80 percent.

upvoted 0 times

...

Oretha

2 months ago

I think I remember something about the 80 percent rule being common for loans, but I'm not entirely sure if it's a maximum or minimum.

upvoted 0 times

...