Finance
A North Dakota investor uses 'leverage' in real estate. This means they are:
AUsing all cash to purchase properties
BUsing borrowed money to finance a portion of the purchase price to amplify returns on the invested equity✓ Correct
CLeveraging their professional relationships for discounts
DUsing tax laws to defer capital gains
Explanation
Leverage in real estate refers to using borrowed funds (mortgage) to finance property purchases, allowing investors to control more assets than their equity alone would permit. Leverage amplifies returns (and risks) on the equity invested.
Related North Dakota Finance Questions
- A North Dakota homebuyer using a conventional loan at 80% LTV avoids PMI. What does this cost them at purchase if the home costs $320,000?
- A North Dakota lender offering a 5/1 ARM means:
- A North Dakota homeowner deducts mortgage interest on their federal income tax return. Under current tax law, this deduction applies to:
- A North Dakota borrower who is 90 days or more behind on mortgage payments and receives a formal notice from the lender is in:
- A North Dakota buyer 'locks' their mortgage rate for 45 days. This means:
- A North Dakota borrower's mortgage servicer 'transfers servicing' to a new company. Under RESPA, the borrower must be notified:
- A North Dakota lender 'collects in escrow' for property taxes and insurance. This means:
- A North Dakota borrower has a home equity line of credit (HELOC). This instrument is secured by:
Practice More North Dakota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Dakota Quiz →