Finance
Vermont's 'non-recourse loan' in commercial real estate means:
AThe lender can pursue the borrower's personal assets upon default
BThe lender's remedy upon default is limited to the collateral (the property) with no personal liability for the borrower✓ Correct
CThe loan has no repayment requirements
DThe loan converts to equity upon default
Explanation
A non-recourse loan limits the lender's remedy to the collateral upon default — the lender can foreclose on the property but cannot pursue the borrower's personal assets. This is common in large commercial real estate transactions.
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Key Terms to Know
Pre-Approval
A lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
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.
Math Concepts
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