Conforming loans make up the majority of all home loans made in the United States. Essentially, they must meet the standards and guidelines set by the federal government for their Government Sponsored Enterprises, namely Fannie Mae and Freddie Mac—the two main government agencies who ensure a stable market for the buying of mortgage loans.
California Mortgage Advisors, Inc. has have been providing conforming loans to homeowners for over 20 years. CMA has funded Billions in conforming loans over the years and we offer all different types of conforming loans. This includes a wide variety of conventional loans, conforming rates, options, and terms. We are a Direct Seller Servicer to Fannie Mae which means we underwrite, approve and fund your loan per Fannie Mae guidelines. In addition to Fannie Mae, we have over 30 investors we can sell to, which insures we have many options to place your loan. Most importantly, we make sure you find the right home mortgage for your financial situation and need. Call us today at (800) 927-6560 to speak with one of our Mortgage Advisors or you can apply here online.
Conforming Loans & Guidelines:
The most important guideline related to a conforming loan is the size of the mortgage. Since 2006, the conforming loan limit has been $417,000 for single family homes. There is an exception to this loan limit and it’s based on high cost areas like San Francisco, Los Angeles and New York. In higher cost areas, the conforming loan limit can go up to $625,500.
You will find a number of additional guidelines come into play as far as Fannie Mae and Freddie Mac are concerned with conforming loans. This includes the loan-to-value ratio; we offer very high loan-to-value ratios in order to help with the size of down payment needed. There are also guidelines related to:
- Debt-to-Income ratio
- Credit scores and credit history
- Documentation needed
Does The Criteria For Conforming Loans Change?
While you will still need to deal with the categories listed above, the actual rules can and do change from time to time. The biggest example of this is the conforming loan limits. In 1972, Fannie Mae was authorized to start purchasing residential mortgage loans. Since then, the loan limits have increased over time based on the cost of housing to their current levels.
After the Housing Market Crash in 2007, there was a temporary increase in the conforming loan limit as a result of legislation in 2008. In an effort to help the housing market the government authorized the agencies to raise the conforming loan limits as high as $729,750 in expensive metropolitan areas of the country.
Combo Loans: Conforming Loan + Second Mortgage
You can use a conforming loan plus a second mortgage to buy a more expensive home when the conforming loan limit leaves you short. Buying a home with two loans is known as a combo loan. For example, if you want to buy a $550,000 home using a conforming loan of $417,000 and you only want to put down 20% or $110,000. Under this scenario, you need another $23,000 to purchase the home. This where our Mortgage Advisors can assist you obtaining a Home Equity Line of Credit (HELOC) or a Second Mortgage for the remaining $23,000. Both loans will fund and record at the close of escrow on your new home. In some cases, you may want to look at taking an 80% Jumbo loan instead of a combo loan. A CMA Mortgage Advisor can provide you options under both scenarios to see which option will offer you the best interest rate and overall payment structure.
Contact Us Today:
Call us today at (800) 927-6560 to speak with one of our Mortgage Advisors or you can apply here online.