High Balance Conforming Loans And Mortgage Terminology Discussed In Loan Love's New Article
SAN DIEGO, Dec. 2, 2013 /PRNewswire-iReach/ -- LoanLove.com is a borrower advice website that helps borrowers to understand their mortgage options in a fun and entertaining way. The website provides a number of articles and guides that both first time home buyers and experienced home owners can benefit from. Their large selection of valuable resources, first class knowledge and connections to top rated industry professionals has helped the website to fulfill its mission – to help borrowers find a loan that they will love by providing the latest information on mortgage lending trends, the real estate market and the U.S. financial landscape. A newly posted article on the loan advice website illustrates the terms and jargon used when working with peculiar loan types. This new article, entitled "Coming to Terms: Understand Conventional vs. Conforming Loan Types" gives a complete understanding of mortgage loan terminology while helping loan borrowers learn about high balance conforming loans and what separates them from conventional loans.
Loan Loan's article begins by mentioning: "Maneuvering the maze of finances involved in the loan application process is tough enough without someone throwing a vocabulary quiz at you. Unfortunately, the terms tossed your way as you consider financing options for the home of your dreams can start to all sound alike. Worse yet, it is not unusual for the media, websites or even real estate professionals to confuse the issue further by using terms interchangeably, like conventional vs. conforming loans, that aren't actually synonymous."
As the article continues, a guide sheet detailing a few of the most commonly used mortgage terms is given to help loan borrowers differentiate between the mortgage loan terms.
For starters, the article expresses the need to compare the differences between the loan terms Fannie Mae and Freddie Mac. Although commonly when working with mortgage loans, many loan borrowers remain confused as to what these two terms actually mean. To put into layman's terms, Fannie Mae and Freddie Mac serve as nicknames used when referring to the Federal National Mortgage Association and the Federal Home Loan Mortgage Company, respectively. These are both publicly traded entities with government sponsoring. They buy loans that lenders have made to home buyers in what is known as the secondary market. This frees up additional funds from banks, which increases the availability and affordability of loans to low to moderate income home buyers. On a basic level, both entities may seem similar, but they are different in the sense when it comes to the type of banks they work with and the limits they set on the loans that receive their backing.
More over, VA and FHA loans are often confused with one another. Both loan programs offer distinct advantages for those they apply, but are substantially different in the way they work. VA loans in particular are loans that are made accessible for military veterans. The Department of Veterans Affairs does not actually make loans, but they establish the ground rules that determine how other lenders make VA loans. Whereas FHA loans are loans insured by government against default. The Federal Housing Administration does not actually make the loans in the same sense with the VA. Instead, it sets the guidelines used for qualifying FHA lenders. Because these loans are insured, either by VA or FHA, lenders can give borrowers the option of either no down payment (with a VA loan) or a very low down payment (FHA loans most of the time only require 3.5% down payment).
Lastly, the article explains the difference between conforming and conventional loans. It explains that conforming loans are those that conform to the limits set by Fannie Mae and Freddie Mac. Nonconforming loans are those that exceed these limits or do not meet the funding criteria – so called "jumbo" mortgages fall into this category. Conventional loans are simply loans that are not government insured. They may meet the conforming guidelines, but without the government backing they are still "conventional". So, by definition, a conventional loan may also be conforming, but not all conforming loans are conventional loans.
The learn more on high balance conforming loans, please visit LoanLove.com for the full article.
Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, firstname.lastname@example.org
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SOURCE Internet Income University
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