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Real Estate Word of the Day: Usury

Usury refers to the act of charging interest on a loan at a rate that exceeds the legal limit set by law. Historically, usury laws were established to protect borrowers from exorbitant interest rates and to ensure fair lending practices. These laws vary by jurisdiction, but their core purpose remains the same: to prevent lenders from exploiting borrowers through excessive interest charges.


Mortgage lenders must adhere to state and federal usury laws when setting interest rates. If a lender charges an interest rate above the legal limit, it can be considered usurious, leading to legal consequences and financial penalties. For borrowers, usurious rates can make mortgage payments unaffordable, potentially leading to…

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