A borrower has a credit score of 620 and is applying for a conventional loan. What is the most likely impact on their loan terms?
Correct Answer
B) They may face higher interest rates and require a larger down payment
A 620 credit score is considered subprime for conventional loans. While not an automatic denial, borrowers with scores in this range typically face higher interest rates, may need larger down payments, and could have additional requirements such as mortgage insurance or compensating factors.
Why This Is the Correct Answer
A 620 credit score is considered subprime for conventional loans. While not an automatic denial, borrowers with scores in this range typically face higher interest rates, may need larger down payments, and could have additional requirements such as mortgage insurance or compensating factors.
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