(MODIFY THIS TEXT)
WHAT ARE THEY?Conforming loans are the subset of conventional loans that adhere to a list of guidelines issued by Fannie Mae and Freddie Mac, two unique mortgage entities created by the government to help the mortgage market run more smoothly and effectively. The guidelines that conforming loans must adhere to include a maximum loan limit, which is $726,200 in 2023 for a single-family home in most U.S. counties.
WHO ARE THEY BEST FOR?Borrowers who meet the minimum credit score, DTI and other requirements for conforming loans and who don’t need a loan larger than current conforming loan limits.
WHAT ARE THEY?Non-conforming loan (also known as “jumbo” loans) are conventional loans that don’t stick to the guidelines issued by Fannie Mae and Freddie Mac, usually because they exceed maximum loan limits. This makes them riskier to lenders, meaning borrowers often face an exceptionally high bar to qualification — interestingly, though, it doesn’t always mean higher rates.
Be careful not to confuse jumbo loans with high-balance loans. If you need a loan larger than $726,200 and live in an area that the Federal Housing Finance Agency (FHFA) has deemed a high-cost county, you may be able to qualify for a high-balance loan, which is still considered a conventional, conforming loan.
WHO ARE THEY BEST FOR?Borrowers who need access to a loan larger than the conforming limit amount for their county.
WHAT ARE THEY?Non-qualified mortgages are given to borrowers who can’t meet the requirements for a traditional loan. While they often serve borrowers with bad credit, they can also provide a way into homeownership for a variety of people in nontraditional circumstances. The self-employed or those who want to purchase properties with unusual features, for example, can be well-served by a non-qualified mortgage, as long as they understand that these loans can have high rates and other uncommon features.
WHO ARE THEY BEST FOR?Homebuyers who have a low credit score, a high DTI ratio or find themselves in unique circumstances that make it difficult to qualify for a traditional mortgage, yet are confident they can safely take on a mortgage.
WHAT ARE THEY?Portfolio loans are mortgages that are held by the lender, rather than being sold on the secondary market to another mortgage entity. Because a portfolio loan isn’t going to be passed on, it doesn’t have to meet all of the strict rules and guidelines associated with Fannie Mae and Freddie Mac. This means that portfolio mortgage lenders have the flexibility to set terms that can make qualification easier for borrowers.
WHO ARE THEY BEST FOR?Borrowers looking for flexibility in their mortgage in the form of lower down payments, waived private mortgage insurance (PMI) requirements or loan amounts that are higher than conforming loan limits.
WHAT ARE THEY?A fixed-rate loan has a stable interest rate that will stay the same for the entire life of the loan. This creates clear expectations for the borrower, eliminates surprises and provides a payment plan in which monthly principal and interest payments never vary.
WHO ARE THEY BEST FOR?Borrowers who want stability and predictability in their mortgage payments.
WHAT ARE THEY?In contrast to fixed-rate mortgages, adjustable-rate mortgages (ARMs) have an interest rate that will change over the loan term. Although ARMs typically begin with an introductory period with a low interest rate (compared to a typical fixed-rate mortgage), borrowers should expect a rate increase after this period ends. Precisely how and when it will increase is determined by the specifics of the loan: A 5/6 loan, for instance, will hold a steady rate for five years before beginning to adjust every six months.
WHO ARE THEY BEST FOR?Borrowers who are able to refinance or sell their house before the end of the fixed-rate introductory period may save money with an ARM.
WHAT ARE THEY?Homebuyers looking for a low-down-payment conventional loan or a 100% financing mortgage — also known as a “zero-down” loan, as no cash down payment is necessary — have several options.
Buyers with strong credit may be eligible for a number of loan programs that require only 3% down. These include the conventional 97% loan, Fannie Mae’s HomeReady loan and Freddie Mac’s Home Possible and HomeOne loans. Each program has slightly different income limits and requirements, but all offer 3% down loan options.
WHO ARE THEY BEST FOR?Borrowers who don’t want to put down a large amount of cash, need to boost their down payment to avoid private mortgage insurance (PMI) or want to split their loan amount in order to avoid a “jumbo” loan.
.
The blockquote element is used to indicate the sector quotation of a large section of text from lorem another source.
– MASSI DOE
Consectetur adipiscing elitras molestie nunceu urna mattis vitae scelerisque nunceu urna mattis vitaefelis viverra ullam eulorem its bibendum nislvel malesuadat amet conrra ullam eulorem its bibenmolesnceu.
