What is the primary difference between a share loan for a cooperative and a traditional mortgage for a condominium in New York?
Correct Answer
D) Share loans are secured by personal property while mortgages are secured by real property
The fundamental difference is the type of property securing the loan. Share loans are secured by personal property (corporate shares and proprietary lease), while traditional mortgages are secured by real property (the actual real estate unit and land interest).
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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