Finance
A Colorado 'hard money' loan is typically characterized by:
ALow interest rates and long amortization periods
BShort terms, high interest rates, and being based primarily on the property's value rather than borrower creditworthiness✓ Correct
CGovernment guarantees
DRequirements for perfect credit
Explanation
Hard money loans are short-term, high-interest-rate loans typically provided by private investors rather than traditional lenders. They are based primarily on the property's value (collateral) rather than the borrower's creditworthiness, and are often used by investors for quick purchases or rehabilitation projects.
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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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
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.
Math Concepts
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