Finance
A New Jersey FHA loan requires a minimum down payment of:
A5% of the purchase price
B3.5% of the purchase price (for borrowers with credit scores of 580 or higher)✓ Correct
C10% of the purchase price
D20% of the purchase price
Explanation
FHA loans require a minimum 3.5% down payment for borrowers with credit scores of 580 or higher.
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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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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