Finance
A 'conforming loan' in Georgia is one that:
AConforms to state usury laws
BMeets Fannie Mae and Freddie Mac's guidelines for purchase, including loan limits✓ Correct
CConforms to FHA insurance requirements
DHas a fixed interest rate
Explanation
A conforming loan meets the underwriting standards (credit, DTI, LTV) and loan limits set by Fannie Mae and Freddie Mac, making it eligible for purchase in the secondary market.
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Key Terms to Know
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.
Debt-to-Income Ratio (DTI)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.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
State-Specific Concepts
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