Finance
In South Carolina, a 'non-recourse loan' protects the borrower by:
AAllowing them to refinance at any time
BLimiting the lender's recovery to the collateral only, with no personal liability for any deficiency✓ Correct
CPreventing the lender from foreclosing
DGuaranteeing the interest rate for the full term
Explanation
A non-recourse loan limits the lender's remedy to foreclosing on the collateral. The lender cannot pursue the borrower personally for any deficiency remaining after the foreclosure sale.
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
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.
Math Concepts
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