Finance
A mortgage that covers two or more parcels of land is called a:
APackage mortgage
BBlanket mortgage✓ Correct
CWraparound mortgage
DParticipation mortgage
Explanation
A blanket mortgage covers two or more parcels under a single mortgage. Developers often use blanket mortgages for subdivisions, with a 'partial release' clause allowing individual lots to be released from the mortgage as they are sold.
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Key Terms to Know
Amortization
The 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.
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.
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