Finance
In South Dakota, a 'jumbo loan' exceeds which threshold?
A$300,000
B$500,000
CThe conforming loan limit set by FHFA (approximately $766,550 in 2024)✓ Correct
DThe FHA loan limit for the county
Explanation
Jumbo loans exceed the conforming loan limits set by the FHFA (approximately $766,550 for most areas in 2024). They cannot be purchased by Fannie Mae or Freddie Mac and typically have stricter qualification requirements.
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Key Terms to Know
Amortization
The 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.
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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