Finance
Which of the following describes a 'swing loan' (also known as a bridge loan) in Oregon real estate?
AA loan with a rate that swings between a fixed and variable rate
BA short-term loan used to bridge the gap between buying a new home and selling the old one✓ Correct
CA commercial construction loan
DA reverse mortgage for seniors
Explanation
A swing (bridge) loan provides short-term financing that allows a buyer to purchase a new property before the sale of their existing property closes. The borrower uses equity in their current home as collateral.
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Key Terms to Know
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.
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.
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.
Math Concepts
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