Conforming Loans: Flexible Terms and Great Rates
At Blue Square Mortgage LLC, our certified mortgage professionals can help you find a conforming loan with terms that work for your financial goals. A conforming loan is one of many mortgage opportunities available through our broad array of private lenders. This conventional loan option meets the lending limits set forth by federally backed mortgage giants Fannie Mae and Freddie Mac. Our team will walk you through the specifics of conforming loan approval and determine if this type of mortgage makes sense for the home of your dreams. Contact us today if you live in Bellevue, Sammamish, or surrounding Washington communities and are looking for a dependable partner in home finance.
A Conventional Type of Loan
Among the many tiers of mortgage option, the largest division is between conventional and non-conventional loans. A conforming loan is a type of conventional loan in that it is not backed or insured through the federal government. This differs from non-conventional loans, which are insured or funded in part or in full through government divisions like the U.S. Department of Housing and Urban Development (HUD). HUD-backed loans include those like FHA loans (through the Federal Housing Administration) and USDA loans (through the U.S. Department of Agriculture).
There are a few key differences between conventional loans, which include conforming loans, and non-conventional loans. Conventional loans traditionally require at least a 20% down payment, although we can provide alternative mortgage options if you would prefer a lower down payment. USDA and FHA loans can have a 0% or 3.5% down payment. Conventional loans do, however, offer more flexible fixed and adjustable rate options and often have better interest rates.
Conforming vs. Non-Conforming Loans
Conforming loans are called such because they “conform” with the criteria set by Fannie Mae and Freddie Mac. These companies buy mortgage loans through lending institutions, like our partners, and secure them for resale to investors. What this means for you, in simple terms, is that there is a loan limit for a conforming loan. In our local Washington communities, these limits are:
- For a single unit: $417,000
- For two units: $533,850
- For three units: $645,300
- For four units: $801,950
If you plan to purchase a home that exceeds these limits, we can help you explore non-conforming a non-conforming loan, also known as a “jumbo loan” or “jumbo mortgage.” They, too, are conventional loans in that they are not federally insured. They simply exceed the loan limits set forth through Fannie Mae and Freddie Mac, and thus have different approval terms and down-payment requirements.
Conforming Loan Eligibility
The Blue Square Mortgage professionals will ask you pointed questions about your finances and goals as a home owner to determine if a conforming loan or other home financing option makes sense for you. Since this is a type of conventional loan, baseline qualifying requirements include at least a 620 credit score, and the ability to pay at private mortgage insurance (PMI) if you put down less than a 20% down payment. We will also evaluate your finances and ability to make your monthly payments over the life of your loan.
Get Started with a Conforming Loan
Our team knows the ins and outs of conforming loans. We can quickly determine what mortgage options are best-suited for your financial future and determine eligibility fast. Contact Blue Square Mortgage LLC if you are interested in purchasing a home in Bellevue, Sammamish, or surrounding communities.