Property Ownership
In Hawaii, what is a 'purchase money mortgage' compared to a 'refinance mortgage'?
AA. A purchase money mortgage is used to buy property; a refinance replaces an existing mortgage with a new one✓ Correct
BB. They are the same; the terms are interchangeable
CC. A purchase money mortgage is always larger than a refinance
DD. A refinance always has a lower interest rate than a purchase money mortgage
Explanation
A purchase money mortgage is originated to buy property. A refinance replaces an existing mortgage, typically to get a lower rate, change loan terms, or access equity.
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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