Conforming Mortgage
A loan eligible for purchase by the two major federal agencies that buy mortgages, Fannie Mae and Freddie Mac. Conforming mortgages cannot exceed a legal maximum amount, which was $322,700 in 2003; it is raised every year. They must also meet the agencies' underwriting requirements regarding credit, documentation, property features, and other factors. A mortgage in excess of the conforming maximum, which is identical in other respects, will have an interest rate about 3/8% higher. Borrowers who need an amount larger than the maximum will often do better taking a conforming loan for the maximum and a second mortgage for the excess.
Popular Mortgage Terms
Having the builder borrow the money needed for construction. ...
The sum of the monthly mortgage payment, hazard insurance, property taxes, and homeowner association fees. Housing expense is sometimes referred to as PITI, standing for principal, ...
A reverse mortgage program administered by FHA. ...
A borrower who does not meet the underwriting requirements of mainstream lenders. Sub-prime borrowers pay more than prime borrowers and are sometimes taken advantage of. ...
The date on which the closing occurs. On a purchase transaction, there is no financial advantage to the buyer/borrower in closing on any day of the month, as compared to any other day. ...
A second mortgage offered at preferential (subsidized) terms to those who qualify. For example, a labor union may offer members who are first-time home buyers a silent second to finance ...
A documentation rule where the borrower discloses assets and their source but the lender does not verify the amount. ...
A written document evidencing the lien on a property taken by a lender as security for the repayment of a loan. The term 'mortgage' or 'mortgage loan' is used loosely to refer both to the ...
The highest rate possible under an ARM contract; same as 'lifetime cap.' It is often expressed as a specified number of percentage points above the initial interest rate. ...
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