Conventional LoansConventional home loans are mortgage loans that eligible to be sold to Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac, are financially insured through the backing of the U.S. government. Conventional loans make up about seventy percent of all mortgage loans originated in the U.S. Conventional loans are restricted based on the size of their loan, in most cases this limit has been $ 417,000 nationally, except for Hawaii and Alaska, which had slightly higher loan limits. Conventional loans are underwritten to predetermined underwriting guidelines, typically using an automated computer system such as Fannie Mae’s desktop underwriter that analyzes a borrowers risk based on factors such as income, credit, assets, loan to value, employment type, etc. Most lenders typically underwrite loans strictly following these guidelines, but may place further restrictions such as loan to value or debt to income restrictions on loans they underwrite. Conventional loans generally range between ten and thirty years in length. A borrower should expect to put a minimum of five percent down or have five percent equity or more if they are looking to refinance their mortgage on a conventional loan. A borrower can purchase or refinance their primary residence, second home, or investment property (up to 4 units) using a conventional loan. Conventional loans require a borrower to be in good credit standing and place restrictions on borrowers who may have filed bankruptcy or had a home foreclosure in the past. Borrowers who apply to refinance or purchase a conventional mortgage loan that do not have a minimum of twenty percent down or twenty percent equity will be required to obtain mortgage insurance.
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Rates, News & Advice Articles
September 1, 2010
The stock market got into rally mode today to start the month of September with a bang. Surging by over 200 points in heavy trading as investors rallied into equity positions. The strong rally in the DOW follows a steady decline of the DOW in the past 60 days as the “double dip” recession...
August 27, 2010
The stock market finally caught a relief rally on Friday, as the DOW jumped well over 100 points on optimism from a reassuring speech from Fed Chairman Ben Bernanke. The DOW was able to get back above the 10,000 point market as investors took advantage of lower equity prices across the board on the market....
August 23, 2010
The markets strong start lost momentum over the course of trading on Monday and the market ended up dropping nearly forty points in trading. The dip follows a swing of nearly 100 points in light trading on Monday as investors pulled back when he market was up nearly fifty points when the market opened...
August 19, 2010
Jobs are certainly the largest component to any economy and has the potential to drive markets sharply. Today, we witnessed another example of the fallout from the employment sector as unemployment claims jumped to their highest levels in the last nine months, news that quickly led to a dramatic sell-off...