Conventional Home Mortgages

Conventional mortgages are those mortgages which are not government loans (such as FHA or VA loans), or specialty loans offered to borrowers with less than perfect credit (often referred to as Sub-Prime or Alt A) or even specific product offered by a bank which will stay with that bank for their income stream (often referred to as a Portfolio Loan). Conventional Mortgages have traditionally been split into two different categories, jumbo and conforming loans.

Conforming loans would be classified as any loan with a loan amount which was at or below the maximum loan amount as established by the Federal National Mortgage Association (FNMA or 'Fannie Mae') and the Federal Home Loan Mortgage Corporation (FHLMC or 'Freddie Mac'). However, since the passage of H.R. 3221, otherwise known as the Housing and Economic Recovery Act or 2008, many limits have been increased in high cost areas to 125% of the median housing value. Even though the national limit for 2009 remains at $417,000, some counties in high cost areas can go as high as $625,500 and still others in Alaska, Hawaii, Guam and the Virgin Islands can go higher yet.

With this new higher limit, there has been an introduction of a new pricing structure on conforming conventional loans as well. Loans up to $417,000 will receive the best pricing available for conventional loans. The secondary market now demands risk-based pricing even on conventional mortgages where this was once a factor only on jumbo loans and on specialty type products such as Sub-Prime Loans and Alt-A mortgages.

Now there are pricing adjustments for everything from credit scores to impounds on loans (required or not); from loan to value ratios to low balance loans; from units to cash out refinances in addition to the standard adjustments for non-owner occupied transactions.

If you need a conventional mortgage with a loan amount or $417,000 or less, then you are in luck as these mortgages are still the least costly mortgages available. Contact us today and we can help you whether your needs are for a purchase or a refinance. We can compare and know which lenders offer which programs, at what rates and save you the hassle of shopping lender after lender. Let us put our experience and knowledge to work for you!