Contracts
In Hawaii, a real estate contract that is 'void' is:
AVoidable at the option of one of the parties
BValid but unenforceable under certain circumstances
COf no legal effect and cannot be enforced by either party✓ Correct
DEnforceable only by one party
Explanation
A void contract has no legal effect from the beginning (ab initio). Neither party can enforce it.
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Key Terms to Know
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.
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.
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