Are you planning on purchasing a home in Auburn or purchasing a home in Opelika and are wondering how conventional mortgage loans work? It used to be that when people would get a mortgage, they would go to a lender and borrow money. The lender that they got their loan at would hold onto their loan and collect payments from them each month according to the loan terms.
In the United States, there are two large buyers on the secondary market for mortgages — Fannie Mae and Freddie Mac. These two entities produce a set of guidelines where if mortgages fit the guidelines, then they agree to buy them. These guidelines outline the basic “rules” of getting a mortgage from them, and part of the outline is a limit on the amount that the loan can be for.
Types of Conventional Loans
It is possible for a conventional loan to be considered a “conforming” or a “non-conforming” loan. Conforming loans adhere to the guidelines set forth by Fannie/Freddie and also the “conforming” loan limit set out by the two entities.
The 2016 conforming loan limits were set at $417,000 for all contiguous states, the District of Columbia, and Puerto Rico and $625,500 for Alaska, Guam, Hawaii, and the U.S. Virgin Islands. For more detailed information, visit this page.
For all of your real estate needs in the Auburn-Opelika area please contact me at (334) 332-7263 or email me at LauraSellers01@Gmail.com or visit my website. I look forward to helping you buy the home of your dreams or sell your existing home. Search for Auburn homes for sale or Search for Opelika homes for sale here.