Kevin is considering purchasing either a condominium or cooperative apartment, both priced at $400,000. His lender explains the key differences in available loan products. Which statement accurately describes a major financing difference between these options?
Correct Answer
B) Condominium financing typically offers longer loan terms and lower rates than cooperative financing
Condominium financing uses traditional mortgages secured by real property, which typically offer 30-year terms and lower interest rates. Cooperative financing uses share loans secured by personal property, which typically have shorter terms (10-20 years) and higher rates due to increased lender risk.
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Related Topics & Key Terms
Key Terms:
Related Concepts
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
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