When studying various home buying options, potential borrowers are likely to come across terms and phrases that need explaining beyond what the dictionary can offer. Lenders can guide home buyers through this new vocabulary but understanding the innerworkings of a home loan can empower borrowers.
Among one of the more common expressions is a reference to conforming home loans. Simply, conforming loans meet certain guidelines established by Fannie Mae and Freddie Mac – namely, that the loan falls under a certain amount. Non-conforming loans are sometimes referred to as "jumbo loans".
Although the limits can vary from region to region, for 2017 the conforming limit is $424,100. In San Diego where homes are pricier, the high balance conforming loan limit is $612,150. Conforming loans generally offer better interest rates and lower fees but mortgage professionals can assist buyers in picking the right loan for their needs.
Today, conforming no-point 30-year fixed mortgage rates averaging 3.875 percent while 15-year rates are near 3.125 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.