Conventional loans may be conforming and non-conforming
mortgages. Conventional mortgage loans are loans that are not
secured by the government. The more common government loans are
FHA, VA, and USDA type loans. Government sponsored Enterprise or
better known as GSE’s are most commonly backed by Fannie Mae and
Freddie Mac. A loan backed by a GSE is known as a conforming
conventional mortgage loan.
Conforming conventional mortgage loans follow the guidelines of
Freddie Mac and Fannie Mae. This is important to the lender as
these loans may be sold off to one of them in order to free up
funds for the lender to make other loans.
Non-Conforming conventional loans maybe retained by the lender
in their own portfolio or sold off to the secondary market not
sponsored or controlled by a government enterprise. It is not
uncommon to see these loans purchased by mutual fund companies
or insurance companies.
Non-Conforming Conventional loans may not be subject to loan
limits or other underwriting restrictions that one may face with
conforming conventional loans. However, the consumer should be
aware they may see or experience a difference in rates and
cost.
If you have any questions or would like further assistance,
please contact us directly and
we will try our very best to
help wherever possible.
Call us on 941-444-9240
