Finance
Which of the following is a characteristic of a 'jumbo loan' in Alaska?
AIt is insured by FHA
BIt exceeds the conforming loan limits set by Fannie Mae and Freddie Mac✓ Correct
CIt requires no down payment
DIt is only available through government-sponsored lenders
Explanation
A jumbo loan exceeds the conforming loan limits established by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac purchase. Because jumbo loans cannot be sold to Fannie or Freddie, they typically carry higher interest rates and stricter qualification requirements.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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