Finance
A 'non-recourse' loan in Alaska real estate means:
AThe lender may pursue the borrower's personal assets if the collateral is insufficient to repay the loan
BThe lender's remedy upon default is limited to the collateral property and the lender cannot seek a deficiency judgment✓ Correct
CNo prepayment penalty applies to the loan
DThe lender cannot charge more than a stated maximum interest rate
Explanation
In a non-recourse loan, the lender's only remedy upon default is foreclosure on the collateral property. The lender cannot sue the borrower personally for any deficiency (the difference between what the property sells for at foreclosure and the outstanding loan balance).
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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