Finance
A NJ lender's appraisal for a mortgage loan is ordered to protect:
AThe buyer's investment
BThe lender's collateral by confirming the property's value supports the loan amount✓ Correct
CThe listing broker's commission
DThe title company's liability
Explanation
A lender orders an appraisal to ensure the property's market value is sufficient to support the loan as collateral, protecting the lender's security interest if the borrower defaults.
People Also Study
Related New Jersey Questions
- Private mortgage insurance (PMI) on a NJ conventional loan can be cancelled when the borrower's equity reaches:Finance
- In a NJ appraisal, 'market value' is most accurately defined as:Property Valuation
- A NJ buyer's lender requires title insurance as a condition of the mortgage loan. This is the:Finance
- A NJ borrower who loses their job before closing on a home may face mortgage denial if the lender re-verifies employment and finds:Finance
- A NJ lender who charges a prepayment penalty on a residential mortgage loan must disclose this in the:Finance
- A NJ bank appraises a property at $410,000 for a purchase price of $430,000. The lender loans 80% of the lower of appraised value or purchase price. What is the maximum loan amount?Real Estate Math
- An appraiser in New Jersey who is hired by a lender for a mortgage appraisal owes their primary duty to:Property Valuation
Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
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.
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.
Math Concepts
Study This Topic
Practice More New Jersey Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New Jersey Quiz →