If you’re looking to get approved for a great mortgage in the Rego Park, NY area, then talk to the staff at Professional Mortgage Solutions. When you set out to find your dream home, you will need to understand the various mortgage programs available and compare rates. It is also important to understand whether your loan will be a conforming or non-conforming loan. In this week’s blog post, learn more about finding the best conforming loans from Professional Mortgage Solutions in Rego Park, NY.
Understanding Conforming versus Non-conforming Loans
Understanding the difference between a conforming and a non-conforming loan is easy. A conforming loan follows the restrictions set by Government-Sponsored Entities (GSEs) like Fannie Mae and Freddie Mac. This loan then becomes eligible for acquisition by these agencies. A non-conforming loan would exceed these limits and not be eligible.
The limits for conforming loans are updated annually to reflect current home prices, and may be adjusted for more expensive areas, like New York. A non-conforming loan will not get approved for government backing. To find the annual conforming loan limits, check with the Federal Housing Finance Agency (FHFA). For 2019, FHFA announced that maximum conforming loan limit for one-unit properties is $484,350, an increase from $453,100 in 2018.
Getting Approved for a Non-Conforming Loan
Do you need an amount above the GSE limits? Do not worry, you can still get a loan that is non-conforming, which you will see below. In addition, a higher down payment may be required to secure this larger mortgage. You may even be able to provide enough money down to bring the loan into conforming standards for government programs, such as FHA or VA loans. Explore your options and see if you may qualify, then adjust down payments and apply again if rejected.
Applying for a Jumbo Loan
One type of loan that exceeds conforming limits is called a Jumbo Loan. These can be used for high value homes and financing needs. When you go to apply for a jumbo loan, there will be a deep review of your finances. The lender will want to verify if you are able to repay the large loan amount using several factors. Here are some of the items considered:
- Your credit score: usually you will need a good one to get approved.
- Current debt owed and your debt-to-income ratio.
- Whether the loan is within conforming or non-conforming rates.
- Whether you can get Private Mortgage Insurance (PMI).
- Whether you can offer a down payment (usually they want to see 10-20%).
- Your current cash reserves and assets.
- Your home ownership or rental history.
Interest rates for a jumbo loan may be higher, due to their increased risk. Whether or not you decide to get a conforming loan, Professional Mortgage Solutions is here to help Rego Park, NY residents secure their dream home. Contact our friendly team today with any questions.