Finance
A 'reverse mortgage' is available to Illinois homeowners who meet which primary requirement?
AThey must have a minimum credit score of 720
BThey must be at least 62 years old and have significant equity in their primary residence✓ Correct
CThey must own commercial property only
DThey must have no existing mortgage on the property
Explanation
A Home Equity Conversion Mortgage (HECM), commonly called a reverse mortgage, is available to Illinois homeowners who are at least 62 years old, own their home as their primary residence, and have sufficient equity. The borrower receives payments (or a line of credit) from the lender, and the loan balance grows over time.
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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.
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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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