Finance
Kentucky's usury laws historically capped interest rates on certain loans. Today, for real estate loans in Kentucky:
AA 10% maximum interest rate applies to all mortgages
BFederally chartered lenders and most commercial loans are generally not subject to state usury caps✓ Correct
CAll mortgage rates must be approved by KREC
DInterest rates above 6% require KREC waiver
Explanation
Federal preemption and legal changes have largely removed state usury rate caps for first mortgage loans on residential property and for commercial loans, allowing market-determined rates.
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Key Terms to Know
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.
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.
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.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Math Concepts
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