Conforming home loans are “standard mortgage loans” that conform to the guidelines of Government Sponsored Entities (GSE) such as Fannie-Mae and Freddie-Mac. These GSEs operate under a congressional mandate to stabilize the nation’s residential mortgage markets and expand opportunities for homeownership to the US housing market. The GSEs announce annual guidelines which determine the maximum mortgage loan amounts allowed in the applicable geographic area. The general loan limits for 2017 are $417,000 for a 1-unit property in the continental U.S., although there are some high-cost areas that may exceed this amount. Please contact us via phone, email, or walk-in consultation.
Standard Mortgage Loans
Standard Mortgage Home Loans in MA
If you’re looking to purchase a home, you may need a mortgage. There are many options for different types of mortgage loan programs and financial products on the market today, but the most common remains the standard loan. Standard loans are often referred to as conforming loans or conforming mortgages.
Basically, the way that a
standard mortgage loan
works is that your home functions as the collateral for the lending institution. As the buyer, you’ll make a down payment toward the purchase price, or you may be eligible for down payment assistance programs. The financial institution that you choose may loan you the remainder of the money, with a schedule for repayment and fixed or variable interest rates.
Sometimes, the interest rates of standard home loans are fixed, meaning that the interest rate will stay the same for the term of your mortgage, but in other cases, interest rates are variable, meaning that they will change over the course of the mortgage according to changes in the economy and interest rates. There are pros and cons to each, of course, which you should carefully evaluate as the borrower. Now, when it comes to the term of your mortgage, 30 years is typically the norm, but there are other options available as well.
With all the issues of housing bubbles and economic downturns in the last decade, there has been a lot of concern about mortgages. In reality, homeownership may be an excellent investment for many potential borrowers.