Lisa is purchasing a condominium in Buffalo for $300,000 with a conventional mortgage. Her lender explains that her monthly mortgage payment will include principal and interest. Regarding the interest portion, when does interest typically begin accruing on her mortgage loan?
Correct Answer
A) From the closing date when loan funds are disbursed
Interest on a mortgage loan begins accruing from the closing date when the loan funds are actually disbursed to complete the purchase. This is when the borrower has received the benefit of the borrowed money and the lender's funds are at risk.
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