Conforming Mortgage
A loan eligible for purchase by the two major federal agencies that buy mortgages, Fannie Mae and Freddie Mac. Conforming mortgages cannot exceed a legal maximum amount, which was $322,700 in 2003; it is raised every year. They must also meet the agencies' underwriting requirements regarding credit, documentation, property features, and other factors. A mortgage in excess of the conforming maximum, which is identical in other respects, will have an interest rate about 3/8% higher. Borrowers who need an amount larger than the maximum will often do better taking a conforming loan for the maximum and a second mortgage for the excess.
Popular Mortgage Terms
Cost-of-Funds Index, one of many interest rate indexes used to determine interest rate adjustments on an adjustable rate mortgage. ...
The array of laws and regulations dictating the information that must be disclosed to mortgage borrowers, and the method and timing of disclosure. ...
One or more persons who hove signed the note and are equally responsible for repaying the loan. When One Co-Borrower Has Much Better Credit than the Other: A problem that arises frequently ...
The provision of the U.S. tax code that allows homeowners to deduct mortgage interest payments from income before computing taxes. Points and origination fees are also deductible, but not ...
A documentation rule where the borrower discloses income and its source but the lender does not verify the amount. ...
A contract provision that adjusts the payment on an ARM periodically to make it fully amortizing. ...
The date on which the closing occurs. On a purchase transaction, there is no financial advantage to the buyer/borrower in closing on any day of the month, as compared to any other day. ...
A document that evidences a debt and a promise to repay. A mortgage loan transaction always includes a note evidencing the debt, and a mortgage evidencing the lien on the property. ...
Refinancing for an amount in excess of the balance on the old loan plus settlement costs. When the main objective of a refinancing is to raise cash, the relevant question is whether the ...
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