Finance
Which of the following best describes a 'hard money loan' in Delaware real estate?
AA traditional bank mortgage with strict qualification requirements
BA short-term loan secured by real estate, typically from private investors at higher rates✓ Correct
CA government-backed loan with strict collateral requirements
DA loan with prepayment penalties that make it 'hard' to pay off early
Explanation
A hard money loan is a short-term, asset-based loan typically provided by private investors or companies. It is secured by the property and carries higher interest rates and fees than conventional financing.
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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.
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.
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.
Math Concepts
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