Finance
A reverse mortgage in Missouri allows a homeowner to:
ABorrow against equity without making monthly mortgage payments✓ Correct
BTransfer the mortgage to a child
CRefinance at a lower rate
DSell the home and rent it back
Explanation
A reverse mortgage (HECM) allows eligible senior homeowners to borrow against their home equity with no monthly mortgage payments. The loan is repaid when the home is sold or the borrower moves or dies.
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Key Terms to Know
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.
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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