A lender originates a $400,000 conventional loan that exceeds the conforming loan limit. This loan would be classified as:
Correct Answer
B) A jumbo loan
A conventional loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) is classified as a jumbo loan or non-conforming loan, which cannot be purchased by GSEs like Fannie Mae or Freddie Mac.
Why This Is the Correct Answer
A conventional loan that exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA) is classified as a jumbo loan or non-conforming loan, which cannot be purchased by GSEs like Fannie Mae or Freddie Mac.
More Mortgage Knowledge Questions
A borrower is comparing two loan offers: Loan A has no points and 4.5% interest rate, Loan B has 2 points and 4.0% interest rate. The loan amount is $400,000. How much will the borrower pay upfront for the points on Loan B?
A lender charges a 1% origination fee on all loans. For a borrower obtaining a $250,000 mortgage, what is the maximum origination fee that can be charged without violating the points and fees test under the ATR/QM rule for a first-lien mortgage?
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A borrower is considering paying discount points to reduce their interest rate. Each point costs 1% of the loan amount and reduces the rate by 0.25%. On a $300,000 loan, how much would the borrower pay for 2 discount points?
A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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A borrower's ARM has a negative amortization cap of 115% of the original loan amount. If the original loan was $400,000, what is the maximum loan balance before the loan recasts?
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A property appraises for $400,000. The borrower is getting an 80% first mortgage and a 15% second mortgage. If the lender requires a maximum CLTV of 95%, what is the maximum additional financing the borrower could obtain?