|
Conventional Conforming
“Conforming” loans are the most
popular and publicized loans on the market and most often offer the
best rates in the industry.
The term
“Conforming” refers to loan amounts and guidelines that conform
to government service standards as determined by two well-known
Government Sponsored Agencies, Fannie Mae and Freddie Mac.
Many lenders create
home mortgages that are later sold to other investors. These loans
are usually sold on the secondary money market to the Federal
National Mortgage Association (Fannie Mae) or the Federal Home Loan
Mortgage Corporation, (Freddie Mac). These are the two organizations
that purchase home loans at a discount to resell to investors.
Loans that are
intended for sale to Fannie Mae or Freddie Mac must conform to
strict loan qualification guidelines. They cannot exceed specified
loan limits depending on the type of property and do not offer 100%
financing. Also, there are usually significant rate increases for
taking cash out or if the new loan amount exceeds 80% or 90% of the
property value.
Because of the
strict requirements for a borrower to qualify such as excellent
credit, limits on cash out, and limited loan amounts, this product
is a great solution for customers only looking to lower their
current rate. Other options and products exist with similar rates
and terms, but allow for more liberal underwriting and loan size
guidelines.
Contact Us Now…………
|
