Finance
What is a recourse versus non-recourse loan in Nevada real estate?
AThey are identical in Nevada
BA recourse loan allows the lender to pursue the borrower personally for any deficiency after foreclosure; a non-recourse loan limits the lender's remedy to the collateral property✓ Correct
CA non-recourse loan is only available to businesses
DNevada prohibits recourse loans for residential mortgages
Explanation
With a recourse loan, the Nevada lender can pursue the borrower personally for any deficiency after foreclosure. With a non-recourse loan, the lender's only remedy is the property — they cannot pursue the borrower personally.
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Key Terms to Know
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.
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.
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.
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