Traditional Loans

Conventional Loans

A Conventional loan would be any type of creditor agreement that is not financed or supported by the Veterans Administration (V.A.) or the Federal Housing Administration (FHA). Conventional loans are protected by Fannie Mae (FNMA) and Freddie Mac (FHLMC), which are government-sponsored entities. 

The two kinds of Conventional loans are conforming and non-conforming. A conforming loan must meet the guidelines set by government-sponsored entities like FNMA and FHLMC. A loan that fails to meet these guidelines would be considered non-conforming.   

Advantages 

  • Lower Fees: On a Conventional loan, the fees are typically lower than other types of loan programs because the rate is set by the lender. 
  • Interest Rate: The way lenders determine interest rates is based on borrowers’ credit worthiness and their ability to make the monthly payments. People with higher credit scores are typically able to secure a lower rate of interest.  

Jumbo Loan 

If the amount of a loan exceeds the limit set by Fannie Mae (FNMA) and Freddie Mac (FHLMC), it’s a Jumbo loan. A jumbo loan includes any loan with an amount of over $ 647,200. 

Advantages 

  • Jumbo loans give borrowers the ability to finance a home that exceeds the limit of $ 647,200 set by government-sponsored entities Fannie Mae and Freddie Mac, allow borrowers to buy “more house.” 
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NOT A GUARANTEE, OFFER OR AGREEMENT. EVERETT FINANCIAL, INC. D/B/A SUPREME LENDING NMLS ID #2129 (www.nmlsconsumeraccess.org) 14801 Quorum Dr., #300, Dallas, TX 75254. 877-350-5225. © 2017. Information, rates, & programs are subject to change without prior notice. Subject to credit & property approval. Not affiliated with any government agency. Intended for Texas Consumers Only. Texas- SML Mortgage Banker Registration Residential Mortgage Loan Originator.