Finance
A North Dakota buyer assumes an existing mortgage of $145,000 at 5.5%. Current rates are 7.5%. The benefit to the buyer of assumption is:
AAvoiding the appraisal process
BObtaining below-market financing and potentially saving significantly on interest✓ Correct
CEliminating all closing costs
DRequiring no down payment
Explanation
Loan assumption allows the buyer to take over the seller's existing mortgage at the original, often lower interest rate. In a high-rate environment, assuming a below-market rate loan can save the buyer tens of thousands of dollars over the loan term.
Related North Dakota Finance Questions
- A North Dakota borrower has a debt-to-income ratio that is too high to qualify for a conventional mortgage. Which of the following would most likely improve their DTI?
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- What does 'amortization' mean in the context of a North Dakota mortgage?
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- The Bank of North Dakota (BND) is unique because it is:
- The Truth in Lending Act (TILA) requires lenders to disclose the:
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