For conventional loans, reserves are typically calculated as how many months of principal, interest, taxes, and insurance (PITI)?
Correct Answer
B) 2-6 months
Conventional loan programs typically require 2-6 months of PITI in reserves, depending on factors such as loan-to-value ratio, credit score, and property type. This requirement ensures borrowers have funds available for mortgage payments after closing.
Why This Is the Correct Answer
Conventional loan programs typically require 2-6 months of PITI in reserves, depending on factors such as loan-to-value ratio, credit score, and property type. This requirement ensures borrowers have funds available for mortgage payments after closing.
More Origination Questions
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For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
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