What Are Conventional Loans?
by Don Rafner
Most home buyers get their mortgage money from conventional mortgage loans.
Conventional mortgage loans are simply loans made by private entities such as banks, credit unions, private lenders or thrifts. Loans made by the federally regulated home lenders Fannie Mae and Freddie Mac are also considered to be conventional. Loans insured by either the Federal Housing Administration or the U.S. Department of Veterans Affairs are the two most popular non-conventional mortgage loans.
Conventional mortgage loans come in two basic types, conforming and non-conforming. Lenders consider conventional loans conforming when they are made out for about $417,000 or less for single-family homes. This figure is known as the conforming loan limit. It's important to note, though, that in
many high-cost areas of the country, the conforming loan limit stands at $729,750. This includes the San Francisco area.
Interest Rates, Terms
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