A mortgage broker wants to determine which GSE offers the best pricing for a specific loan type. What factor would most likely NOT influence GSE pricing differences?
Correct Answer
D) The broker's company size and volume
GSE pricing is typically based on loan characteristics such as LTV, credit score, and sometimes geographic factors. The size or volume of the broker's company does not directly affect GSE pricing, as GSEs purchase loans based on the loan's risk characteristics, not the originator's business size.
Why This Is the Correct Answer
GSE pricing is typically based on loan characteristics such as LTV, credit score, and sometimes geographic factors. The size or volume of the broker's company does not directly affect GSE pricing, as GSEs purchase loans based on the loan's risk characteristics, not the originator's business size.
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A borrower purchased a home 6 months ago with a mortgage of $250,000. Due to rapidly rising property values, they now want to refinance to a loan amount of $280,000 to take advantage of better rates and receive some cash. The property has appreciated to $400,000. How is this transaction classified?
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