Recent News and Articles on the Keywords: conforming loans + conforming loan + loan  Related to the article below (Last Update: 8/4/2008)

Noose Tightens on Non-Conforming Loans Seeking Alpha, NY - If it's not a conforming Fannie Mae/Freddie Mac loan, Chase (JPM) does not want any part of it. "BZ" also sent me the following notice from US Bank. 1. ... Seattle Post Intelligencer New loan limits, credit, deduction. Seattle Post Intelligencer - Jul 28, 2008 The bill permanently raises the conforming loan limit from $417000 to 115 percent of the local area median home price, up to $625500. ... CBS Housing Bill Makes It Harder For Borrowers To Qualify And Get ... Best Syndication Jeffrey Scharf, Everybody's Business: Bailing out Fannie and Freddie Santa Cruz Sentinel CNNMoney.com - Kiplinger.com all 6,037 news articles »  FNM - FRE Earthtimes (press release) Louisiana Bancorp, Inc. Announces Earnings for the Second Quarter ... MarketWatch - Aug 1, 2008 ... mortgage backed securities collateralized by conventional, conforming mortgage loans. The Bank recorded net recoveries on its allowance for loan losses ... AGNC Announces Second Quarter 2008 Earnings Earthtimes (press release) QCR Holdings, Inc. Announces Increased Earnings for the Second ... Stockhouse Teche Reports Third Quarter Earnings MarketWatch MarketWatch all 1,040 news articles »  PROV - LABC - TSH CAR Applauds Passage of HR 3221, The "Housing and Economic ... MarketWatch - Jul 30, 2008 The bill permanently increases the conforming loan limit to $625500. CAR has long advocated for higher conforming loan limits. In February, the Economic ... What the housing package could mean to you San Francisco Chronicle FHA changes make housing bill a 'mixed bag' Inman.com (subscription) Highly Appealing FHA Loans [Housing Tracker] Seeking Alpha Curbed - MarketWatch all 18 news articles »  FNM - FRE The housing rescue legislation hits home Mail Tribune, OR - Aug 3, 2008 Increased conforming loan limits: Conforming loan limits were temporarily raised earlier this year, but that increase was set to expire in December. ... The Uppers Asia Times Online, Hong Kong - ... those mortgages that exceed conventional conforming loan limits and home-loan guarantors Fannie Mae and Freddie Mac do not cover the whole loan amount). ... Seattle Post Intelligencer Housing plan signed, but concerns linger San Francisco Chronicle,  USA - Jul 31, 2008 What it means: People trying to buy or refinance a home in the pricey Bay Area may get slightly better rates because loans up to $625000 will be conforming. ... Tipping Point American Enterprise Institute Strapped homeowners get help with new law Orlando Sentinel all 407 news articles »  FNM - FRE BUYINS.NET: PVTB, USBK, HRVE, CMPGY, CQUTF, NOVSP Have Also Been ... Trading Markets (press release), CA - It primarily engages in generating deposits and originating loans. The company's commercial banking services include lines of credit for working capital, ...PVTB - OTC:HRVE - OTC:CMTX What's It All About, Alfie? Town Hall, DC - Jul 31, 2008 Let me outline the benefits that come with a conforming loan. First is a lower rate as conforming loans receive the lowest rates in the industry (about 1/2% ... New housing package likely to ease anxieties Honolulu Star-Bulletin all 2 news articles » Higher Appraised Values lead to Sub-Prime Mess Appraisers not to Blame PowerHomeBiz.com (press release) - Aug 1, 2008 Sub-prime loans were being made to self employed people with good credit, who had a hard time showing enough income to qualify for a conforming loan because ...

Conforming loans

You may notice as you shop for a mortgage that lenders make a distinction between conforming and nonconforming loans. Conforming loans tend to have the lowest interest rates available. Nonconforming loans, also called jumbo loans, often have interest rates that are about 1/2 percent higher than conforming loan rates.

Conforming loans are packaged by originating lenders who intend to sell them on the secondary money market to Fannie Mae or Freddie Mac. These two organizations purchase mortgages from lenders and resell them to investors. In so doing, they provide a ready source of mortgage money for the home finance industry.

Each year Freddie Mac and Fannie Mae establish a new conforming loan limit. As of January 1, 2002, the conforming limit was raised to $300,700 from $275,000. This increase makes lower-cost financing available to more people. In expensive real estate markets, like California and New York, the increased loan limit will make housing affordable to many who couldn't previously qualify to buy.

The higher limit will benefit first-time buyers particularly as interest rates rise. At the end of December, interest rates had already risen to the July 2001 level. Rates are expected in rise further as the economy gathers steam. Borrowing a $300,000 mortgage at 7 1/4 percent rather than 7 3/4 percent saves the borrower about $100 a month. For some, the $100 a month savings could make the difference between qualifying and not qualifying for a mortgage.

HOUSE HUNTING TIP: Conforming loans may offer the best rates and terms on the market, but they do pose restrictions for many home buyers. Because the loans are intended for sale, they must conform to rigid guidelines. Consequently it's harder to qualify for these loans. They usually require squeaky-clean credit. If you have difficulty qualifying for a conforming loan, talk to a portfolio lender. Portfolio lenders generally don't sell their loans, so they have more flexibility in qualifying borrowers.

Another restriction is the upper loan limit. Home buyers who need to finance more than $300,700 may be able to reap the benefits of a low-interest rate conforming loan by using piggyback financing.

With piggyback financing, the borrowers uses a combination of first and second mortgages to finance the home purchase. If the first mortgage doesn't exceed $300,700, the borrower takes advantage of the lower conforming interest rate.

For example, let's say you want to buy a home for $450,000. You have $100,000 for a down payment and you need to finance $350,000. The monthly payment on a $350,000 jumbo loan at 7 3/4 percent is $2506.

However, using piggyback financing, your monthly payment will be about $2420, a savings of $86 a month and $1,032 a year. A conforming $300,700 mortgage at 7 1/4 percent will cost $2050 per month. A second mortgage for $49,300 at 8 1/4 percent will cost $370, on a 15-year loan with payments amortized over 30 years. The 30-year amortization lowers your monthly payment, and makes qualifying easier.

A disadvantage of piggyback financing is that the second mortgage is usually not fully amortized. In the above example, the second loan will be due in 15 years, at which point you will owe the mortgage lender about $42,000. However, the chance of keeping this financing for 15 years is slim. Most homeowners sell or refinance within 5-7 years.

Homeowners who are refinancing can also take advantage of low-cost conforming mortgages, as long as the amount they refinance doesn't exceed $300,700. For some homeowners, it makes sense to pay down a larger mortgage in order to save a 1/2 percent in interest rate.