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CONFORMING MORTGAGE

adjective | /kuhn form ing/
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Conventional, conforming mortgage loans are those loans that meet Fannie Mae (FNMA) or Freddie Mac (FHLMC) guidelines. Fannie & Freddie are very large companies operated by the Federal Government. They do not originate mortgage loans but purchase them on the 'secondary market' from mortgage lenders.

OneTrust Home Loans originates conforming loans using Fannie/Freddie guidelines so that they will be purchased on the secondary market thereby replinishing our funds to make more mortgage loans.

Conforming mortgage loans require Mortgage Insurance whenever the borrowed loan amount is greater than 80% of the purchase price or home value. This mortgage insurance is obtained through various private mortgage insurance (PMI) companies. This lowers the risk to the lenders who can then provide better rates to the borrower because there is less risk of losing money.
PMI can be refinanced away once the balance of the mortgage is paid down to 80% of the current market value and will AUTOMATICALLY be removed when the loan is paid down to 78% of the original sales price or appraised value.

BENEFITS: DRAW BACKS:
  • Up to 97% financing
  • Both purchase and refinance
  • 1-4 units allowed.
  • Low interest rates.
  • Low downpayment.
  • Up to 30 year payback terms.
  • PMI goes away eventually and monthly payment decreases.
  • Fixed rate and fixed payment is available.
  • Co-Signers allowed.
  • Investors allowed.
  • 2nd homes allowed.
  • Maximum loan amount of $424,100, $625,000 in some high cost counties. (1 unit)
  • Mortgage Insurance if the loan amount is greater than 80% of the sales price or appraised value.
  • Very good credit is required.
  • Impounds are required if less than 10% down.