Finance
A conventional loan in Virginia is one that is:
AInsured by the FHA
BGuaranteed by the VA
CNot insured or guaranteed by any government agency✓ Correct
DMade directly by the federal government
Explanation
A conventional loan is not insured or guaranteed by any government agency (unlike FHA, VA, or USDA loans). Conforming conventional loans must meet Fannie Mae/Freddie Mac guidelines.
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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.
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.
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.
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