Conforming Versus Non-Conforming Loans in Coral Springs and the Benefits to You

Home Loans Coral Springs, FL | Mortgage Loans | Mortgage Loan

Home sales in South Florida are booming, with sellers receiving multiple offers within a few days of listing their properties. This means that there is competition among buyers to try and secure the house of their dreams quickly. 

 

Many times buyers make the critical mistake of shopping for a home without knowing the types of loans available to them or without having a loan secured. The result is that they miss out, their offer is rejected by the seller, and they have to search elsewhere. 

 

The key to securing the right home is to understand the types of home loans in Coral Springs and how they can benefit you. This will make things easier with you having the knowledge and financing to secure the house you always wanted. 

 

Conforming Loans in Coral Springs

 

Conforming loans are ordinary home loans underwritten by a bank, a mortgage company, or other financial institutions. They can be sold to Freddie Mac or Fannie Mae and must meet specific standards to be purchased by them. Congress created both to provide stability in the housing market and increase liquidity to make home-buying possible. They buy private loans, repackage them to sell to investors, and use the funds to make future loans. 

 

They set criteria to decide which loans in Coral Springs qualify for purchase from Fannie Mae or Freddie Mac. The Federal Housing Finance Agency uses these standards based on the dollar amount, lender’s guidelines, and it does not originate from a federal agency. 

 

The second standard is you must meet the lender’s specific criteria, such as a credit score of at least 620 and certain income levels. Third, the loan cannot come from the backing of a federal agency to include the USDA, VA, and FHA mortgages. Any government loans from them will not qualify as conforming under the standards set out by Fannie Mae and Freddie Mac. 

 

Non-Conforming Loans in Coral Springs

 

Non-conforming loans are those that don’t meet the guidelines from Freddie Mac and Fannie Mae. They are mortgages where the borrower has lower credit scores, smaller down payments, or are exceeding the loan limits. 

 

For example, loans from the VA, FHA, and USDA require little to no down payments with less than perfect credit. These mortgages are backed directly by a federal agency and benefit those who do not qualify for conventional mortgages. Freddie Mac and Fannie Mae will not purchase them, as they are already underwritten by one of the above agencies. 

 

Jumbo mortgages exceed the amounts outlined by Fannie Mae and Freddie Mac, which fall under the standards of non-conforming loans in Coral Springs. These are buyers who are purchasing high-end homes and want loans that can go up to $2,000,000.  They have credit scores of at least 700, higher income levels, and down payments versus the FHA, VA, and USDA loans. 

 

For instance, someone who is looking to purchase a house that is selling for $1,500,000 will use a jumbo mortgage to finance it. They need a down payment ranging from 10% to 20% of the purchase price and have the liquidity to cover it. Fannie Mae and Freddie Mac don’t consider these loans necessary to facilitate purchases and financing in the mortgage markets. 

 

Ace Mortgage Can Help You With Your Loans

Knowing the differences between these mortgage loans in Coral Springs is the key to finding the right mortgage for you. Call Ace Mortgage today at 954-777-4774 and see how they can help you find the best home loans. They have the relationships, experience, and knowledge to get you the financing to purchase your dream home.

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