A borrower has an existing conforming loan of $600,000 and wants to get a second mortgage for $200,000 on the same property in an area with an $850,000 conforming limit. What determines if the second mortgage can be conforming?
Correct Answer
B) The combined loan amount must not exceed the conforming limit
For conforming loan eligibility, the total combined loan amount ($800,000) must not exceed the area's conforming loan limit ($850,000). GSEs consider the aggregate financing when determining conforming status.
Why This Is the Correct Answer
For conforming loan eligibility, the total combined loan amount ($800,000) must not exceed the area's conforming loan limit ($850,000). GSEs consider the aggregate financing when determining conforming status.
More Mortgage Knowledge Questions
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