There are 3 types of loans that are customary in the residential mortgage business. You can count on the NC Triangle’s Mr. Mortgage to help you find the solution that is best for you.
Conforming Loans – These loan types of the most common and may also be referred to as “conventional” loans. Conforming loans are labeled as such because the underwriting standards “conform” to the guidelines set forth by Fannie Mae and Freddie Mac, the agencies which purchase the bulk of mortgage loans. These loan types are commonly chosen by borrowers who can put down at least 10% (or have 10% equity in their home if refinancing), above average credit scores, and an appropriate income.
Government Loans – Commonly referred to as VA, FHA, USDA. These loan types have some type of backing from the government, hence the name. They are regularly used by borrowers who may have less than 10% to put down and/or have average or below average credit scores. In the case of VA loans, one must be an eligible veteran to qualify. USDA loans have specific geographic parameters that must be adhered to.
Jumbo or Non-Conforming – Jumbo loans are issued to borrowers when the loan amount exceeds the conforming limit as set by Fannie Mae and Freddie Mac, currently $417,000 (in most areas) These “non-conforming” loans are designed for situations where the loan amount is high and/or there are special circumstances surrounding the borrower and/or the type of property that is pledged as collateral.
When’s it’s time for you to secure a mortgage for your home purchase, please contact me, Andy Holloman at 919-971-4030 for a no-obligation conversation. I work closely with clients throughout North Carolina and Virginia, including Research Triangle communities such as Fuquay-Varina, Holly Springs, Garner, Apex, Morrisville, Chapel Hill, Durham, North Raleigh, Wake Forest and Raleigh.