A buyer in Arizona assumes an existing mortgage. If the assumption is 'qualified,' this means:
Why The new buyer has been approved by the lender to take over the loan Is Correct
Answer B: The new buyer has been approved by the lender to take over the loan
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.
People Also Study
Related Arizona Questions
- An Arizona buyer assumes the seller's existing mortgage. The buyer's lender requires a 'due-on-sale' clause to be enforced. This means:Finance
- An Arizona 'assumption fee' charged by a lender when a buyer assumes an existing mortgage is:Escrow & Title
- Arizona is classified as a 'lien theory' state. This means that when a borrower takes out a mortgage:Finance
- When a lender requires a borrower to pay private mortgage insurance (PMI), it is typically because the borrower's loan-to-value (LTV) ratio is:Finance
- A buyer assumes an existing $200,000 mortgage on an Arizona property. The purchase price is $290,000. The buyer pays the difference in cash. What is the buyer's cash requirement at closing (excluding all other closing costs)?Finance
- A buyer in Arizona takes title 'subject to' an existing mortgage. This means:Escrow & Title
- When a buyer 'assumes' an existing mortgage in Arizona, the buyer:Escrow & Title
- A lender requires a maximum 43% debt-to-income (DTI) ratio. A borrower has monthly debt payments of $750 and gross monthly income of $5,800. Can they add a mortgage payment of $1,200?Real Estate Math
Key Terms to Know
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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.
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.
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →