First Home Equity Loans

Conventional loans

Conventional loans

"Conventional" loans, simply stated are loans that are not part of any specific government program. Typically they cost less than FHA Loan and can be a bit more difficult to qualify for.

There are two primary catagories when thinking about conventional loans: 

Conforming Loans - These loans have a maximum loan amount, which are set by the government, along with some other rules or guidelines that are set by Fannie Mae or Freddie Mac, which are two companies that provide the financial backing for conforming loans. 

Non-Conforming Loans - These loans are a bit less standard, with features, pricing and eligibility having multiple variables. This causes First Home Equity Loans to be a stand out. FHEL has multiple sources depending on every homeowners financial situation. 

It should be noted that some conventional loans do have a requirement for Mortage Insurance. 

 

Conforming  

Conventional (conforming)
        $484,350 IN MOST COUNTIES
  • Most common loan type
  • Loan amount must be $484,350 or less in most counties and may be as high as $726,525 in high-cost counties.
  • If your down payment is less than 20%, you’ll typically need mortgage insurance

Conforming Jumbo 
        $484,350 TO COUNTY LIMIT
Non-Conforming  

Jumbo (non-conforming)
        UP TO $1-2 MILLION
  • Jumbo loan for amounts greater than the Conforming Jumbo limit in your county, up to $1-2 million
  • Rules vary by lender, but usually need good credit and a high down payment to qualify

Non-conforming (other)
  • Loans of any size that do not fall into another category
  • Some loans in this category are intended for borrowers with poor credit. These loans tend to have high rates and may contain risky features. These can include:
    • Loans that allow for minimal documentation of your income
    • Loans that allow you to pay only the interest or allow your loan balance to increase
  • Some lenders also offer niche programs for mainstream borrowers with unusual circumstances. These can include:
    • Loans for properties with non-standard features (such as more than 10 acres of land, properties with agricultural income, or properties that are difficult to appraise)
    • Loans for affluent customers with tricky finances, such as self-employed borrowers, or newly graduated doctors




 

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