What is a conforming fixed rate mortgage
What is Conforming Mortgage?
Conforming mortgage is a home loan that is eligible to be sold to the
Federal National Mortgage Association (Fannie Mae) or the Federal
Home Loan Mortgage Corporation (Freddie Mac). More on Fannie
Mae and Freddie Mac.
What is Non-conforming Mortgage?
Nonconforming loans are mortgages that fall outside of FNMA and
FHLMC acceptable guidelines, such as low credit scores, or
unacceptable property types. However, most are non-conforming
because the loan amounts are higher than those set by Fannie Mae
and Freddie Mac. Nonconforming loans larger than the conforming
loan limits are called "Jumbo" loans.
Why Conforming Mortgage?
Whether fixed rate or adjustable, 15-year term or
loans traditionally have the lowest interest rates available on the
home finance market.
What is Conforming Mortgage Rate?
Fannie Mae and Freddie Mac do not set the interest rates for
conforming mortgages. They only set the guidelines for conforming
loan products. Individual banks set their own conforming mortgage
interest rates and fees.
Why do Conforming Loans have the lowest rates?
Because banks can sell conforming mortgages to Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation and immediately recoup their funds, they are not limited
by their market sizes or capital strength when it comes to making
conforming home loans. Small neighborhood banks can competeSource: conformingrate.com