Conforming loans, otherwise known as conventional loans, are mortgages that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac. Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. All year round, Fannie Mae and Freddie Mac are working for you, establishing limits on what constitutes a conforming loan in a mean home price. Buying back mortgage loans allows these agencies to provide a continuous flow of affordable funding to banks that reinvest money back into additional mortgage loans. Fannie Mae and Freddie Mac exclusively buy loans that are conforming, to repackage into the secondary market and effectively decreasing the demand for non-conforming loans. Hamilton Mortgage Services specialize in conventional mortgage loans in Boca Raton, Fort Lauderdale and Miami. For more information on convention loans or to get pre-approved contact us at (954)688-9193.
Advantages of Conventional Loans
Because the loans need to be attractive on the wholesale market, conventional loans have higher minimum credit scores and other criteria that can make it more difficult to qualify for than government run programs. One benefit, however, is that you typically see a lower interest rate.While many think that a 20% down payment is required for all conventional loans, many lenders now offer low down payment options.
How to Qualify for a Conventional Loan
Qualifying for a conventional loan is generally easy because it is not a government backed loan, instead regulated by Fannie Mae and Freddie Mac, whom are two agencies that regulate mortgage lending in the United States of America.
- Minimum Fico credit score of 620
- Have a 20% down payment Want to avoid PMI by putting at least 20% down
- Have a high income (low debt-to-income ratio)
- Need a loan amount that is above the FHA loan limit
Conventional Loan Limits
- Conventional loan limit in low-cost areas is $453,100
- Conventional loan limit in high-cost areas is $679,650
Apply for a Conventional Loan
- Hamilton Mortgage Services specialize in conventional mortgage loans in Boca Raton, Fort Lauderdale and Miami. For more information on convention loans or to get pre-approved contact us at (954)688-9193.
