Finance
What is a 'pledged asset mortgage' and when might it be used in Illinois?
AA mortgage where the property itself is the only collateral
BA loan structure where the borrower pledges additional assets (stocks, bonds) as collateral to avoid PMI or reduce the down payment requirement✓ Correct
CA government-backed mortgage that pledges federal assets as security
DA mortgage requiring a co-signer to pledge their own property
Explanation
A pledged asset mortgage allows a borrower to pledge investment accounts (stocks, bonds, mutual funds) as additional collateral instead of using that cash for a down payment. The borrower can purchase with little or no down payment, keep their investments, and potentially avoid PMI. This is used by wealthy buyers in Illinois who prefer to maintain their investment portfolio while still purchasing real estate.
Related Illinois Finance Questions
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- A reverse mortgage allows homeowners to:
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