FinanceIntermediateArizona Exam

A 'blanket mortgage' in Arizona is secured by:

APersonal property only

BMultiple parcels of real property under one mortgage instrumentCorrect

CBoth real and personal property

DAn entire neighborhood through community assessment

Why Multiple parcels of real property under one mortgage instrument Is Correct

Answer B: Multiple parcels of real property under one mortgage instrument

A blanket mortgage covers multiple parcels of real property under a single mortgage instrument. It is commonly used by developers who want to pledge several lots as collateral, with a partial release clause allowing individual lots to be released as they are sold.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

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Key Terms to Know

Deed of Trust

A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.

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.