Conforming Mortgage Loans
Conforming mortgages are the most widely used and traditional product available today. Qualifications for these loans are determined by Fannie Mae and Freddie Mac. Both organizations have established criteria for minimum credit score, maximum level of debt relative to income, minimum down payment/equity requirements, and maximum loan amount. In most instances the maximum loan amount for a single family residence, condominium, or townhouse is $417,000. However there are exceptions for higher cost areas including Essex, Middlesex, Suffolk, and Norfolk Counties in Massachusetts. There are also higher loan limits for multi-family (2-4 unit) residences. Primary residences, second homes, and investment properties are eligible for Conforming financing.
Private Mortgage Insurance (PMI) is required when there is less than a 20% down payment on a purchase mortgage or less than 20% equity on a refinance. PMI can be paid by the borrower monthly or in a lump sum at closing. It can also be paid by the lender, which typically carries a slightly higher interest rate than a borrower paid PMI.
Conforming mortgages usually carry the best available loan terms for qualified borrowers who are seeking a mortgage within the established loan amount limits.
Also Read: How Do I Qualify for a Home Mortgage?
Local Rate 411 Matches You With The Right Lender!