Finance
What is a 'bridge loan' and how might it be used in a Nevada real estate transaction?
AA government loan for rural Nevada development
BA short-term loan that helps a buyer purchase a new home before their current home sells, bridging the gap between the two transactions✓ Correct
CA loan specifically for Nevada bridge and infrastructure development
DA type of reverse mortgage available only to seniors
Explanation
A bridge loan is a short-term financing tool that allows a homeowner to access equity from their current home to fund the down payment on a new purchase before the old home sells. In Nevada's competitive Las Vegas market, where buyers may find their dream home before selling their current one, bridge loans provide flexibility — though they typically carry higher interest rates and fees.
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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.
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
State-Specific Concepts
DRE Regulation
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