A borrower benefit applies to high LTV refinance loan transactions.
The new loan must provide a benefit to the borrower in the form of at least one of the following:
- a lower P&I payment;
- a lower interest rate;
- a shorter amortization term; or
- movement to a more stable product (for example, from an ARM or step-rate modification to a fixed-rate loan).
Refer to B5-7-01, High LTV Refinance Loan and Borrower Eligibility for additional information.