Types of loans which typically used to purchase a home
Subject : Business
Question: Which of the following types of loans is typically used to purchase a home?
A) Personal loan
B) Student loan
C) Mortgage loan
D) Car loan
Expert Verified Solution:
The correct answer is:
C) Mortgage loan.
Explanation:
A mortgage loan is specifically designed to finance the purchase of real estate, such as a home. The property itself serves as collateral for the loan, and the borrower agrees to repay the loan amount along with interest over a specified period, typically 15 to 30 years.
In contrast:
A) Personal loan is usually unsecured and can be used for a variety of purposes, but it is not specifically intended for purchasing real estate.
B) Student loan is used to cover educational expenses, not real estate purchases.
D) Car loan is used to finance the purchase of a vehicle, not a home.
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