Finance
A conventional loan that exceeds the conforming loan limit set by the FHFA is called a:
AFHA loan
BVA loan
CJumbo loan✓ Correct
DBridge loan
Explanation
A jumbo loan exceeds the FHFA conforming loan limits and is not eligible for purchase by Fannie Mae or Freddie Mac, typically requiring stricter underwriting.
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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.
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.
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.
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