Which factor would make a jumbo loan LEAST attractive to secondary market investors?
Correct Answer
A) High loan-to-value ratio
High LTV ratios increase default risk, making loans less attractive to secondary market investors. While jumbo loans are non-conforming by definition due to their amount, they can still be attractive if they have strong credit characteristics and lower LTV ratios.
Why This Is the Correct Answer
High LTV ratios increase default risk, making loans less attractive to secondary market investors. While jumbo loans are non-conforming by definition due to their amount, they can still be attractive if they have strong credit characteristics and lower LTV ratios.
More Mortgage Knowledge Questions
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A borrower asks about the difference between discount points and origination fees. What is the most accurate explanation?
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