Finance
In Hawaii, what is the term for the process by which a lender evaluates a borrower's creditworthiness and the property's value before approving a loan?
AOrigination
BUnderwriting✓ Correct
CServicing
DSecondary market transfer
Explanation
Underwriting is the process by which a lender assesses the risk of a loan by evaluating the borrower's financial profile (income, credit, assets) and the property's appraised value.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
AmortizationThe 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.
Math Concepts
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