What is the difference between conforming loans and non-conforming loans?
A. – Conforming loans: A conventional mortgage that conforms to the loan amounts and underwriting criteria established by government-sponsored enterprises. Conditions of those underwriting criteria may require some borrowers to escrow for taxes and hazard insurance and have mortgage insurance to protect against loan default. As a result, conforming loans often offer lower interest rates and lower monthly payments than non-conforming loans. – Non-conforming loans: A non-conforming conventional mortgage has different underwriting criteria and may provide more flexibility than conforming loans. For example, escrow is optional and mortgage insurance is not required. Also, a variety of property types (i.e., 2-4 unit buildings, second homes, or investment properties) qualify for non-conforming loans.
