easy · National Real Estate Exam
Under the principle of 'hypothecation,' the borrower retains possession of the property while the lender holds a security interest.
How do points relate to this concept?
- Points are part of the consideration the borrower pays for the use of the lender's money
- Points are the legal mechanism that creates the lien on the property
- Points ensure that the borrower never has to repay the principal
- Points allow the lender to take possession of the property earlier
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