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7 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Types of Conforming Loans
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Fixed Rate Loan
Adjustable Rate Mortgage Hybrid ARM Super Conforming |
Loan limitations $417,000 for 1family properties
Super conforming mortgage loan for high cost areas require larger loan amounts ranging from $417,001-625,500 for single family properties. |
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Non-Conforming Loans
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Loans that do not meet requirements established by Fannie Mae & Freddie Mac. Considered to be riskier type of financing when compared to a conforming mortgage loan.
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Conventional loans that do not meet the guidelines established by Fannie Mae & Freddie Mac
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Examples of Non-conforming loans
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Jumbo-$ amt. of mortgage exceeds established loan limits
Alt-A-borrowers who have good credit but don't meet underwriting criteria for conforming prime loans Subprime-for borrowers with poor credit & poor credit history Niche Loans-mortgage loans for unique circumstances or needs. Non-traditional ARMs- option ARMs & Interest only ARMs |
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Non-Conventional Government Loans
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FHA -insures loans made by approved lenders against losses if the borrower defaults.
Veterans Administration-guarantees loans. The guarantee is an insurance contract that guarantees the lender will recover a specific % of the loan amount in the event of foreclosure (25% for loan amts. of $417,000). Entitlement is the amount that a veteran can be guaranteed for VA loans. The basic entitlement is $36,000 for loan amounts up to $144,000. VA offers increased entitlement up to $104,250 to help with down payments in higher cost areas. Not given in form of cash or checks. USDA-makes & guarantees loans in rural areas (Guarantee fee 2% purchase loans & .5% for refinance loans) (Annual fee .3% of unpaid purchase loans on all SFHGLP) USDA will not guaranty loans on properties that produce income in any way. |
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Loan-to-Value Ratio
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LTV formula
Loan amount/Appraisal value or purchase price, whichever is less. |
This ratio is used when determining the best program for a borrower & if they are required to pay Private Mortgage Insurance (PMI).
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Combined Loan-to-Value
Aka CLTV or TLTV |
CLTV (TLTV) Formula
1st + 2nd loan amounts/Appraisal value or purchase price, whichever is less |
Measures how the first & second debt combined compares to the value of the home
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High Combined Loan-to-Value
Aka HCLTV or HTLTV |
HCLTV (HTLTV) Formula
All loan amounts including max credit limits/Appraisal value or purchase price, whichever is less |
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