What is the difference between a conforming and non-conforming loan?
A conforming loan is a conventional loan that meets the guidelines of Fannie Mae or Freddie Mac, the nation’s largest servicers of conventional loans. Consumers meeting approval guidelines can obtain a standard conventional loan up to $359,650, the current maximum loan amount. A non-conforming loan could be a jumbo loan that exceeds these standard limits—these loans require a private investor or a bank that offers a portfolio of loan opportunities. Many lenders have the ability to place a jumbo loan, but often with a minimal increase in the rate. Additional fees may also be applicable, depending on the market and the investor. A non-conforming loan can also be referred to as a sub-prime loan, or more commonly a “B C loan.” These loans are used when consumers do not qualify for the standard conventional loan, because of credit, income or down payment requirements. There are many new financing opportunities on the market, it is best to check with a mortgage banker or your personal banker
