Finance
An assumable mortgage in New Hampshire allows:
AThe seller to keep the mortgage after the sale
BA qualified buyer to take over the seller's existing mortgage on its current terms✓ Correct
CThe lender to assign the mortgage to another lender
DThe buyer to reduce the interest rate unilaterally
Explanation
An assumable mortgage allows a buyer to take over the seller's existing loan, keeping the original interest rate and terms. FHA and VA loans are generally assumable (with lender qualification of the new borrower); most conventional loans are not.
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Key Terms to Know
Discount Points
Prepaid 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.
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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