What is a Conventional or a Conforming Mortgage?
A conforming or conventional mortgage is the type of mortgage in which the underlying terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. About 35-50% of mortgages, depending on market conditions and consumer trends, are conventional mortgages. In other words, Fannie Mae and Freddie Mac guarantee or purchase 35-50% of all mortgages.
Conventional mortgages may be fixed-rate or adjustable-rate mortgages.
Fixed Rate Mortgage
If you elect to do a fixed rate mortgage for a specific term (number of years), your rate will be the same throughout that term. Typical fixed rates are 30, 25, 20, 15 and 10 years, with the 30 year fixed rate being the most popular.
Adjustable Rate Mortgage
Adjustable rate mortgages are exactly what the term adjustable means and that is the mortgage rate is set for a specific number of years and then can adjust accordingly. The most common adjustable rate mortgages are 1/1, 3/1, 5/1, 7/1, 10/1 ARMs. These types of mortgages remain the same for the specific term, then adjust annually. These mortgages are good for some folks who wish to may be living in their home for a short period of time. Be sure to know the margin that is tied to the mortgage. Check out this report on adjustable mortgages.
Typically a conforming mortgage requires a minimum 10% to 20% down payment, a credit score minimum 620 and a total debt ratio not exceeding 41-44%.
Do You Qualify for Conventional Mortgage?
Go ahead complete the Pre-Approval form. One of our family mortgage professionals will contact you to get you on your path to home ownership.
What is a Jumbo Loan?
Jumbo Loans are considered non-conforming loans, because the loan size exceeds what is generally considered conforming loan values. Today, a typical Jumbo Loan is one which exceeds the conforming loan limits of $417,000.
Jumbo Loans have different rates and different loan to value requirements when underwriting. These rates and LTV (loan to value) will vary based on loan size. The larger the loan size the lower goes the LTV.
Assets, income and credit rule when it comes to qualifying for a Jumbo Loan, yet there are may be other variables.
Jumbo loans are available for both purchase and refinance.
To see if you qualify for a Jumbo Loan, CLICK HERE or call one our family mortgage professionals, 302-266-9500 or toll free 877-266-9500.
HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance. Expanded seller contributions to closing costs are allowed.
Benefits to You, the Borrower
- Low down payment and flexible mortgage terms (fixed–rate, adjustable rate, or interest–only).
- Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.No lender-requested appraisal.
- No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.
- Expanded seller contributions for closing costs allowed.
- Available for primary residences, second homes and investment properties.
Many condo project requirements are waived, ask us.
HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation – up to 35% of the as completed value, no more than $35,000.