Home mortgage experts

Conforming Loans

A conforming mortgage loan is the most commonly sought out mortgage program. This is the type of loan you may see in context with Fannie Mae or Freddie Mac.

Conforming loans have a certain credit requirement and set of guidelines that must be met in order to qualify.

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The conforming loan amount is a moving figure that is adjusted every year or so. The 2021 conforming loan limit is $548,250. We Anticipate the conforming loan limit to increase to more than $625,000 for year 2022.

Benefits and Considerations

A conforming loan can be one of the best options out there for a prospective borrower. A 15, 20 or 30 year fixed conforming mortgage is an excellent decision to lock in a non-changing rate for the life of your loan.

No interest rate surprises
With a fixed-rate mortgage, the interest rate won’t change for the life of your loan, protecting you from the possibility of rising interest rates.
Down Payment
Conforming mortgages can be achieved with as little as 3% down.
Cashout Option
A conforming mortgage can be an excellent vehicle to access your equity now. A cashout refinance is an option to borrow your equity now. For example, if you had a home worth $300,000 with a current mortgage balance of $150,000, you could swap that mortgage out with say a $200,000. The result being that you’d get to access $50,000 of equity now in exchange for taking a higher mortgage balance.

Requirements and Qualifications

A mortgage that has higher than an 80% Loan To Value ratio will require mortgage insurance in the world of conforming loans.

Credit Score
Credit scores are typically considered more stringent for a conforming loan when comparing to an FHA loan. Lenders need to see at least a 620 credit score to be eligible for a conforming mortgage.
Down payment
If purchasing, you need to put at least 3-5% down for a conforming loan. When putting 3-5% down, you would need PMI (private mortgage insurance) as you would be higher than 80% Loan To Value.