In Colorado, a 'conforming loan' is one that:
Why B. Meets Fannie Mae and Freddie Mac's guidelines for purchase, including maximum loan limits, credit, and income requirements Is Correct
Answer B: B. Meets Fannie Mae and Freddie Mac's guidelines for purchase, including maximum loan limits, credit, and income requirements
Exam Tip: Finance
Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.
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Key Terms to Know
A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
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.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Math Concepts
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