Finance
A 'nonconforming loan' in North Dakota is a mortgage that:
ADoes not conform to Fannie Mae/Freddie Mac purchase guidelines (typically exceeds conforming loan limits or has non-qualifying features)✓ Correct
BIs issued by a non-bank lender
CDoes not conform to NDREC regulations
DIs not supported by a promissory note
Explanation
Nonconforming loans are mortgages that don't meet Fannie Mae/Freddie Mac purchasing guidelines, either because they exceed the conforming loan limit (jumbo loans) or have features that don't qualify under standard guidelines.
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Key Terms to Know
Promissory Note
A written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
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.
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.
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.
State-Specific Concepts
DRE Regulation
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