Finance
A Kansas consumer's FICO score is 720. This score would generally qualify them for:
AOnly subprime mortgage products
BConventional mortgage financing at competitive interest rates✓ Correct
CGovernment-insured loans only
DNo mortgage products are available below 750
Explanation
A 720 FICO score is generally considered a good credit score, qualifying the borrower for conventional mortgage financing at competitive interest rates.
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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.
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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Math Concepts
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