A conventional loan for $1,200,000 is originated with a 10% down payment, 740 credit score, and 35% DTI ratio in a high-cost area where the conforming limit is $1,149,825. The most accurate description is:
Correct Answer
B) Non-conforming jumbo loan with excellent underwriting
Despite the excellent borrower qualifications, the loan amount of $1,200,000 exceeds the conforming limit of $1,149,825, making it a non-conforming jumbo loan. Strong underwriting characteristics don't change the conforming/non-conforming classification.
Why This Is the Correct Answer
Despite the excellent borrower qualifications, the loan amount of $1,200,000 exceeds the conforming limit of $1,149,825, making it a non-conforming jumbo loan. Strong underwriting characteristics don't change the conforming/non-conforming classification.
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