Finance
An Alaska buyer obtains a 'stated income' or 'no-documentation' loan. This type of loan:
AIs the most common type of mortgage for first-time homebuyers
BIs now largely prohibited for most residential transactions under the Dodd-Frank ability-to-repay rules✓ Correct
CIs insured by the FHA
DRequires a minimum 40% down payment
Explanation
No-documentation and stated income loans — where borrowers claimed income without verification — were common before the 2008 financial crisis and contributed to widespread defaults. The Dodd-Frank Act's ability-to-repay rule effectively eliminated most of these products for residential mortgages by requiring income verification.
Related Alaska Finance Questions
- The Truth in Lending Act (TILA) requires lenders to disclose the annual percentage rate (APR). The APR differs from the note rate because:
- In Alaska, lenders typically require 'seasoned funds' for a down payment, meaning:
- The 'loan-to-value ratio' (LTV) is important to lenders because a lower LTV indicates:
- An acceleration clause in a mortgage allows the lender to:
- A buyer in Alaska obtains a conventional loan with an LTV (loan-to-value) ratio of 90%. The lender will most likely require:
- The 'Alaska Housing Finance Corporation' (AHFC) provides which of the following services?
- An Alaska buyer is applying for a USDA Rural Development loan. One key eligibility requirement is that the property must be:
- Under Regulation Z (Truth in Lending Act), lenders must provide the annual percentage rate (APR) because:
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