Finance
A 'VA loan' is available to eligible veterans and is characterized by:
AA. A required 10% down payment
BB. No down payment requirement and no private mortgage insurance (funded by a VA funding fee)✓ Correct
CC. Interest rates set by the VA below market rates
DD. A 15-year maximum term
Explanation
VA loans offer eligible veterans and service members 100% financing (no down payment) with no private mortgage insurance. Instead of PMI, borrowers pay a one-time VA funding fee that helps sustain the program.
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Key Terms to Know
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.
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.
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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