Finance
The Alabama Consumer Credit Act regulates:
AOnly commercial real estate loans
BConsumer credit transactions including certain real estate loans✓ Correct
CThe activities of AREC
DProperty tax assessments
Explanation
The Alabama Consumer Credit Act regulates consumer credit transactions, including certain residential real estate loans. It establishes disclosure requirements and limitations on credit terms.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
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.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
State-Specific Concepts
Disclosure RequirementsAREC Regulation
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