A conventional loan is any mortgage which is not guaranteed or insured by the federal government. Conventional loans were the first traditional mortgage loans made by local Banks. A loan made with real estate as security and not involving government participation in the form of insuring (FHA) or guaranteeing (VA) loan. The lender can be an institutional lender / banks or a private party. Conventional loans include those loans insured by private mortgage insurance companies.
Conforming Loans
Conventional loans may be conforming and non-conforming. Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac guidelines establish the maximum loan amount, borrower credit and income requirements, down payment, and suitable properties. Fannie Mae and Freddie Mac announce new conforming loan limits every year.
Non Conforming Loans (Jumbo Loans)
The new conforming loan limits are set every January, and the amounts for a jumbo loan are determined based on those limits. The designation of super-jumbo loan has been applied to loans over $650,000. Due to the higher risk associated with these large loans, a jumbo loan usually has a higher Interest
than conforming loans do.
Have more Questions and need information?
For more information please contact Shahla at 619-920-4136 or email homes@newrealestatemarket.com.
