Finance
A conventional loan that exceeds the conforming loan limit set by the FHFA is known as a:
AFHA loan
BVA loan
CJumbo loan✓ Correct
DBridge loan
Explanation
A jumbo loan is a mortgage that exceeds the conforming loan limits established by the Federal Housing Finance Agency (FHFA). Because these loans cannot be purchased by Fannie Mae or Freddie Mac, they typically carry higher interest rates.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
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.
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.
Math Concepts
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