What is a conforming loan in South Florida?

What is a conforming loan in South Florida?

You may have heard that a conforming loan in the counties of Broward, Miami-Dade, and Palm Beach is the best way to get a low-interest rate on your mortgage.

That’s because it’s true! A conforming loan is a mortgage that meets the Federal Housing Finance Agency (FHFA) and the funding criteria of Freddie Mac and Fannie Mae. This means you can take advantage of today’s historically low-interest rates.

So what are you waiting for? Apply now and get pre-approved for a conforming loan for your South Florida home! It could save you thousands of dollars over the life of your mortgage.

Mortgages are a big investment – one that can have a significant impact on your monthly budget and long-term finances. So, it’s essential to understand what you’re getting into before you sign on the dotted line. In this blog post, we’ll explain what a conforming mortgage loan is and how it differs from other types of mortgages. By understanding the basics, you can decide which mortgage is best for you and your family. Ready to learn more? Keep reading!

What is a conforming mortgage loan?

A conforming mortgage loan is a type of home loan that meets the dollar limits set by the Federal Housing Finance Agency (FHFA) and the funding criteria of Freddie Mac and Fannie Mae. This means you can take advantage of today’s historically low-interest rates.

What is a conventional mortgage loan? A conventional mortgage loan is a type of home loan that isn’t insured or guaranteed by the government. This makes them riskier for lenders, making them slightly more expensive for borrowers. However, they also come with fewer restrictions than other types of loans, making them a popular choice for many homeowners. Finally, this article will explore the history and statistics of conventional mortgage loans to help you decide if this type of loan is right for you!

The history of the conventional mortgage loan can be traced back to the early 1900s. At this time, most home loans were short-term, adjustable-rate loans. This made it complex for borrowers to qualify for a loan and challenging to keep up with monthly payments. In response to this, lenders began offering long-term, fixed-rate loans. This type of loan made it easier for borrowers to qualify and also helped to keep monthly payments more affordable.

The conventional mortgage loan became even more popular during the Great Depression. Many banks were failing, and the government began to insure deposits to protect consumers. This made it difficult for borrowers to get a loan from a bank. However, the government-backed FHA loan program began to offer loans to borrowers with less-than-perfect credit, making it possible for more people to buy a home.

In recent years, the conventional mortgage loan has become even more popular due to the housing crisis of 2008. During this time, many borrowers lost their homes to foreclosure. The government created new rules and regulations for the mortgage industry in response to this, making it more difficult for borrowers to get a loan. However, the conventional mortgage loan remained unchanged, making it an attractive option for many borrowers who could not get a loan from another source.

The benefits of a conforming mortgage loan

How to get a conforming mortgage loan

Do your research before you sign on the dotted line. Many facets go into finding a good mortgage company. You will want to ensure that the company you choose is licensed and insured. You will also want to check their Better Business Bureau rating.

A good mortgage company will be able to offer you a variety of loan options. They should be able to explain the pros and cons of each type of loan so that you can make an informed decision. You will want to make sure that you understand the loan terms before you sign any paperwork. The last thing you want is to be surprised by hidden fees or an adjustable interest rate.

Hidden costs: Before signing on the dotted line, ask about any hidden costs or fees.

Adjustable interest rate: If you are offered an adjustable interest rate, ask about the terms and how often the rate will adjust.

Monthly payments: Your monthly payment should be something that you can comfortably afford. Be sure to ask about any late fees or penalties if you are ever late on a payment.

Down payment: You will most likely be required to put down a percentage of the total loan amount. Be sure to ask about any discounts available if you can put down a larger down payment.

Points: Points are fees you will pay upfront to get a lower interest rate. Be sure to ask about any points required to get the interest rate you are looking for.

PMI: Private Mortgage Insurance is a type of insurance that you will be required to pay if you cannot put down at least 20% of the total loan amount. Be sure to ask about the terms of the PMI and how long you will be required to pay it.

Closing costs: Closing costs are the fees you will pay to close your loan. Be sure to ask about any discounts or credits available to help offset the cost of closing.

The difference between a conforming and non-conforming mortgage loan

Conforming mortgage loans meet the guidelines set by Fannie Mae and Freddie Mac. These loans are typically a safer option for borrowers, as they have lower interest rates and are easier to qualify for. To be eligible for a conforming mortgage loan, you will most likely need to have a good credit score and make a down payment of at least 10%.

Non-conforming mortgage loans do not meet the guidelines set by Fannie Mae and Freddie Mac. However, these loans typically have higher interest rates and may be more difficult to qualify for. To qualify for a non-conforming mortgage loan, you will most likely need a good credit score and a down payment of 20%.

The minimum credit score for a conforming loan is typically 620.

If you are looking to buy a home, or if you are looking to refinance your current home, a conventional mortgage loan may be the right choice for you. With a history of being a stable and affordable option, this type of loan is a great choice for many borrowers. So be sure to do your research and shop around for the best interest rate before making any decisions.

The maximum loan limit for a conforming loan in 2022 are as follows:

Broward County*Miami-Dade County*Palm Beach County

  • 1 Unit – $647,200
  • 2 Unit – $828,700
  • 3 Unit – $1,001,650
  • 4 Unit – $1,244,850

A non-conforming loan is a mortgage that doesn’t meet the guidelines for a conforming loan set by Fannie Mae and Freddie Mac.

The most common type of non-conforming mortgage is a jumbo loan. Jumbo loans are for borrowers who need to finance an amount greater than what’s considered conventional in their area. In most counties across the U.S., the limit for a conforming loan for a single unit in 2022 is $647,200. Anything above that is considered a jumbo loan. The minimum down payment is typically 20% for a jumbo loan.

If you’re looking to take out a higher mortgage than the conforming loan limit in your county, you’ll need to apply for a non-conforming loan. Non-conforming loans typically have higher interest rates and stricter underwriting requirements than conforming loans.

The benefit of a non-conforming loan is that you may be able to qualify for a higher loan amount than you would with a conforming loan. This can be helpful if you’re looking to finance a luxury home or a home in an expensive real estate market. The downside of non-conforming loans is that they typically have higher interest rates and stricter underwriting requirements, making them more difficult to qualify for.

Conclusion

A conforming mortgage loan is a loan that adheres to the guidelines set by Fannie Mae and Freddie Mac. These organizations purchase mortgages from banks and other lenders, so having a conforming mortgage will make it easier if you want to finance your home in the future. Conforming loans come with lower interest rates than non-conforming loans, so they’re a great option for people looking for affordable monthly payments. If you’re interested in getting a conforming mortgage, please call Brad Ballard at Goldstar Financial (954) 568-7876 to discuss your options. Finally, we can help you find the best deal on a conforming mortgage loan and ensure that you get the best rate possible.