Finance
What is a conforming loan limit and how does it affect Nevada buyers?
AThe maximum loan allowed by Nevada state law
BThe maximum loan amount eligible for purchase by Fannie Mae and Freddie Mac; Nevada buyers needing larger loans must use non-conforming (jumbo) loans✓ Correct
CThe minimum loan amount requiring private mortgage insurance
DThe loan limit set by the Nevada Housing Division
Explanation
The conforming loan limit is set annually by the FHFA and represents the maximum loan amount that Fannie Mae and Freddie Mac will purchase. For 2024, the standard limit is $766,550 in most Nevada areas.
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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.
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.
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.
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