A conforming loan is a loan that meets Fannie Mae and Freddie Mac’s uniform national standards.
Who Are Fannie Me and Freddie Mac?
Fannie Mae and Freddie Mac are governmental organization that purchases and secures residential mortgage loans from lending institutions.
Why, you might ask?
Fannie Mae and Freddie Mac buy loans from banks and lending institutions, like Mortgage California, so these institutions can continue to loan money to consumers. Fannie and Freddie don’t want to be out on the front lines selling mortgages to consumers. Instead, they prefer to buy packages of residential mortgage loans that meet their criteria from banks and other lending institutions and service the loans once they are in place.
What are the Guidelines?
Fannie Mae and Freddie Mac have debt-to-income ratio limits and documentation requirements. Lenders that want to sell their loans to Fannie or Freddie must follow these guidelines, otherwise they will not be purchased. They also will only buy loans up to a maximum loan amount, which is set based on October to October median price changes.
What are the Loan Limits for San Mateo County in 2009?
| No. of Units | Conforming Loan Limit |
|---|---|
| 1 | $729,750 |
| 2 | $934,200 |
| 3 | $1,129,250 |
| 4 | $1,403,400 |
These loan limits also apply in Santa Clara County in 2009.
What Happens If I Need a Loan Above This Limit?
You would need what we would consider a Jumbo loan. A jumbo loan is anything above the conforming loan limit. Sometimes these loans can come at a slightly higher cost to consumers (between ¼ and ½ percent) because they are more difficult for a bank or other lending institutions to sell on the secondary market. (Remember, Fannie Mae and Freddie Mac only buy conforming loans.)
How Do I Know Which Loan Program is Best for Me?
Because every person’s financial situation is different, it is best to sit down with a San Mateo Mortgage Advisor and go through your current financial picture and your short and long term financial goals. They will help guide you towards the best decision for your particular financial situation.
Need Help Getting a Loan in San Mateo County?
Give me a call at (650) 520-0915 or send me an email at info[@]SanMateoMortgageBlog.com and we can set up an in person or phone consultation. We’ll review your current financial situation and recommend some programs that would work best for you.
Other Posts You May Enjoy
- New Fannie Mae Program for Foreclosures
- San Mateo Mortgage Webinars
- The Process for Getting a Home Loan
- How to Accept a Downpayment Gift from Family
- Mortgage Myth Busted: I Don’t Have 20% to Put Down So I Can’t Buy Now
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Chris Williamson is a Mortgage Advisor with Mortgage California specializing in San Mateo Mortgage.
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This was a helpful post..good one keep going..chekc out my blog as well if u want http://blog.privocorp.com/
Thanks, Ron. Glad you found it informative. Thanks for the link. We’ll check it out!