Finance
In Hawaii, what does it mean when a mortgage is 'current' vs. 'delinquent'?
AA. A current mortgage has a lower interest rate; a delinquent one has a higher rate
BB. A current mortgage has all payments made on time; a delinquent mortgage has missed payments✓ Correct
CC. A current mortgage is a recent loan; a delinquent one is more than 5 years old
DD. A current mortgage is for a primary residence; delinquent refers to investment property
Explanation
A current mortgage has all scheduled payments made on time. A delinquent mortgage has one or more missed payments, which can trigger late fees and eventually foreclosure.
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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.
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.
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.
Math Concepts
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