Finance
Nebraska agricultural mortgage lending differs from residential in that lenders typically:
ARequire no down payment on farmland
BEvaluate farm cash flow, commodity prices, and productivity ratings in addition to standard credit analysis✓ Correct
CAre prohibited from lending on irrigated land
DUse only the cost approach for collateral valuation
Explanation
Agricultural lending in Nebraska considers farm cash flow (crop and livestock income), land productivity ratings, commodity price trends, and farm management in addition to standard creditworthiness metrics.
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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.
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.
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.
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.
Math Concepts
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