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What is Usury?

Usury in real estate refers to the practice of charging excessively high interest rates on loans, particularly in the context of real estate financing. This practice is considered unethical and often illegal, as it can take advantage of borrowers, especially those who are financially vulnerable.   


Here's how usury can impact real estate:

  • Limits Affordability: High interest rates make it more difficult for people to afford homes, especially first-time buyers. This can reduce demand and slow down the real estate market.   

  • Predatory Lending: Usury can be a tool for predatory lenders who target vulnerable borrowers with high-interest loans that are difficult to repay. This can lead to foreclosure and other financial hardships.   

  • State-Specific Regulations: Usury laws vary from state to state. Some states have strict usury laws that limit the maximum interest rate that can be charged on a loan. Other states have no usury laws or have exemptions for certain types of loans.   

It's important for real estate professionals to be aware of usury laws in their state and to avoid any practices that could be considered usurious. Understanding usury can help you protect your clients and ensure fair and ethical real estate


Would you like to learn more about Real Estate? Have you ever wanted to become a New Jersey Real Estate Salesperson License holder? Want to know more about being a New Jersey Licensed Real Estate Agent? Click on the link for the schedule of our upcoming classes for Real Estate: tocrres.com



tan house with brick trim
tan house with brick trim

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