Finance
In Missouri, a 'hard money loan' is characterized by:
ALow interest rates and easy qualification
BShort term, high interest rates, and asset-based lending (primarily based on property value, not borrower creditworthiness)✓ Correct
CGovernment guarantee
DFixed 30-year terms
Explanation
Hard money loans in Missouri are short-term, high-interest loans from private lenders, primarily secured by the property's value rather than the borrower's credit. Used by investors for quick acquisitions, fix-and-flip projects, and situations where traditional financing is unavailable.
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Key Terms to Know
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.
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.
Math Concepts
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