Conforming
Conforming loans have terms and conditions that follow the guidelines set forth by Fannie Mae and Freddie Mac. These two stockholder-owned corporations purchase mortgage loans complying with the guidelines from mortgage lending institutions, packages the mortgages into securities and sell the securities to investors. By doing so, Fannie Mae and Freddie Mac, like Ginnie Mae, provide a continuous flow of affordable funds for home financing that results in the availability of mortgage credit for American
Nonconforming
The most important difference between a loan that conforms to Fannie Mae/Freddie Mac guidelines and one that doesn't is its loan limit. Fannie Mae and Freddie Mac will purchase loans only up to a certain loan limit (currently $417,000). So, if your loan amount will be for more than the conforming loan limit of $417,000, you may be asked to pay a higher interest rate on your mortgage.
Interest Only Loan (For Fixed & ARM Product)
The option to pay 'interest-only' lets you pay only the interest portion of your monthly payment for a fixed period (three, five, seven or ten years). At the end of that period your loan becomes fully amortized, thus resulting in greatly increased monthly payments. Your new payment will be larger than it would have been if it had been fully amortizing from the beginning. The longer the interest only period, the larger the new payment will be when the interest only period ends.
Zero Down Payment
These programs were designed for qualifing borrowers who want to maximize the leverage of their financing for the purchase of a home that will be their primary residence.
High LTV Jumbo Loan
Loans above the maximum loan amount established by Fannie Mae and Freddie Mac are known as 'jumbo' loans. Because jumbo loans are bought and sold on a much smaller scale, they often have a little higher interest rate than conforming, but the spread between the two varies with the economy.
No Documentation Loan
No Documentation Loans require no employment, income, or assets to be stated on your application. No information is verified beyond your credit profile and value of the property.
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