Finance
A mortgage that uses both real and personal property as collateral is called a:
ABlanket mortgage
BPackage mortgage✓ Correct
CParticipation mortgage
DPurchase money mortgage
Explanation
A package mortgage uses both real property (land and improvements) and personal property (appliances, furniture) as collateral for the loan.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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