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Marginal Cost Of Funds. The incremental cost of borrowing more money to fund additional asset purchases or investments. In its simplest calculation, the marginal cost of funds is simply the interest rate on the new loan balance.
Definition: Conventional loans are just between you and the lender. In other words, the payments aren't guaranteed by either the Federal Housing Administration (FHA) or the Veterans Administration (VA). Therefore, banks impose more stringent requirements. They often require 10-20% of the total home value as a downpayment.