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A Net Tangible Benefit is: \u2022 A reduced Combined Rate (refers to the interest rate on the mortgage plus the MIP rate), \u2022 A change from an ARM to a fixed rate Mortgage, and/or. \u2022 A reduced term* That results in a financial benefit to the Borrower.
A state specific NTB test will be required in CO*, MA, MD, ME, RI, SC, VA and WV.
Freddie Mac explains that it requires \u201call documents necessary to evidence compliance with all applicable anti-predatory lending laws and regulations including, for example, any required reasonable tangible net benefit analysis, Borrower disclosures or disclosures relating to affiliated business or service providers.\u201d
Tangible benefits are those that are quantifiable and measurable, sometimes called \u201chard savings.\u201d In other words, they are improvement project benefits that have some specific dollar value, number of labor hours, or other specific metric that can be determined to have been achieved through the project.
Tangible net worth is most commonly a calculation of the net worth of a company that excludes any value derived from intangible assets such as copyrights, patents, and intellectual property. Tangible net worth for a company is essentially the total value of a company's physical assets. These assets can include: Cash.
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Freddie Mac explains that it requires \u201call documents necessary to evidence compliance with all applicable anti-predatory lending laws and regulations including, for example, any required reasonable tangible net benefit analysis, Borrower disclosures or disclosures relating to affiliated business or service providers.\u201d
Fannie Mae requires borrowers to get a material benefit from the mortgage refinance \u2014 also known as a net tangible benefit. Otherwise, a new loan is a waste of money for all involved. Fannie Mae looks for at least one of the following benefits to occur: Lower monthly mortgage payments.
Net Tangible Benefit refers to the benefit that borrower experiences with a proposed loan. The Federal Housing Administration defines a net tangible benefit as the mortgage payment dropping by at least 5%. The reduction must factor in principal, interest, and mortgage insurance.
The first instance where refinancing would have a tangible net benefit would be switching from an adjustable rate mortgage (ARM) to a fixed-rate mortgage. The idea here is to get rate security, but to truly understand the benefit, let's briefly touch on the mechanics of an ARM in comparison to a fixed-rate loan.
Net Tangible Benefit refers to the benefit that borrower experiences with a proposed loan. The Federal Housing Administration defines a net tangible benefit as the mortgage payment dropping by at least 5%. The reduction must factor in principal, interest, and mortgage insurance.

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