An MLO submits a cash-out refinance to LP and receives a message stating 'Cash-Out Amount Exceeds Guidelines.' The loan-to-value ratio is 75% and the borrower has excellent credit. What is the most likely cause of this message?
Correct Answer
B) The cash-out amount exceeds the maximum allowed for the loan program
LP's message about cash-out amount exceeding guidelines typically refers to program-specific limits on how much cash can be taken out, regardless of LTV ratio. Different loan programs have varying maximum cash-out amounts, and some high-balance or jumbo programs may have specific restrictions on cash-out proceeds that differ from standard LTV requirements.
Why This Is the Correct Answer
LP's message about cash-out amount exceeding guidelines typically refers to program-specific limits on how much cash can be taken out, regardless of LTV ratio. Different loan programs have varying maximum cash-out amounts, and some high-balance or jumbo programs may have specific restrictions on cash-out proceeds that differ from standard LTV requirements.
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