Finance
Maryland's Energy Efficient Mortgage (EEM) allows buyers to:
AFinance green improvements as part of their purchase mortgage✓ Correct
BReceive a state grant for solar panels
CAvoid property taxes on energy-efficient features
DQualify for a lower cap rate on investment properties
Explanation
Energy Efficient Mortgages allow buyers to include the cost of energy efficiency improvements in their mortgage, stretching borrowing capacity when the home meets certain efficiency standards.
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Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
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.
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.
Math Concepts
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