Finance
A reverse mortgage is designed for:
AFirst-time homebuyers with low income
BHomeowners age 62 or older who wish to convert home equity to income✓ Correct
CInvestors purchasing commercial properties
DBorrowers with poor credit seeking alternative financing
Explanation
A reverse mortgage (HECM) allows homeowners age 62 or older to convert home equity into cash payments or a line of credit while continuing to live in the home. The loan balance increases over time and is typically repaid when the homeowner sells, moves, or dies.
Related Arkansas Finance Questions
- A lender's 'rate lock' protects the borrower from:
- Private Mortgage Insurance (PMI) is typically required when:
- Arkansas is classified as a 'lien theory' state. This means that when a borrower takes out a mortgage:
- An adjustable-rate mortgage (ARM) differs from a fixed-rate mortgage in that the ARM's:
- A due-on-sale clause in a mortgage requires the borrower to:
- Which type of mortgage loan is insured by the Federal Housing Administration (FHA)?
- Private mortgage insurance (PMI) is typically required when the buyer's down payment is:
- A mortgage that requires only interest payments for an initial period, after which the full principal becomes due, is known as a:
Practice More Arkansas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Arkansas Quiz →