A borrower refinances their home with a cash-out refinance loan of $750,000. The original loan balance was $400,000, and they're taking $300,000 in cash. If conforming limits allow $766,550, how is this loan classified?
Correct Answer
C) Conforming cash-out refinance
The loan amount of $750,000 is below the conforming limit of $766,550. Cash-out refinances are eligible for conforming status as long as they meet all other GSE requirements including loan amount limits and LTV restrictions.
Why This Is the Correct Answer
The loan amount of $750,000 is below the conforming limit of $766,550. Cash-out refinances are eligible for conforming status as long as they meet all other GSE requirements including loan amount limits and LTV restrictions.
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Previous Question
A married couple purchased a home together 3 years ago. Now they are divorcing, and one spouse wants to refinance the existing mortgage to remove the other spouse from the loan while keeping the same loan amount. The spouse remaining on the loan will be the sole borrower. How is this transaction classified?
Next Question
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