Finance
In Ohio, a 'blanket mortgage' is commonly used by:
AIndividual homebuyers purchasing their first home
BDevelopers who finance multiple lots or properties under one mortgage with a partial release clause✓ Correct
CLenders who combine multiple borrowers' credit under one loan
DCommercial tenants who finance tenant improvements
Explanation
A blanket mortgage covers multiple parcels. Developers use them to finance a subdivision's lots under one mortgage, with a partial release clause allowing individual lots to be sold free of the mortgage as they are paid for.
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Key Terms to Know
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.
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.
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