When getting a mortgage you can get lost in all the terms we use in the industry. Really it is pretty simple when broken down. Basically there are 3 sets of rules for mortgage types:
1. Conventional Conforming Mortgage. This is a mortgage that is less than 417,000. Most of these mortgages are insured by Fannie Mae or Freddie Mac. Some are just kept in house with the Servicing Lender.
2. Government Mortgage. This is a category of loans that contain FHA, VA, and USDA home loans. Typically guaranteed in GinnieMae pools. These are very safe investments that are Insured by the Federal Government and also Guaranteed by the Federal Government.
3. Non-Conforming or Jumbo Mortgage. These loans are not guaranteed by any other government agency. They are typically funded with Bank Depositors money or Bank Assets. The can be sold into private pools of investments with large investment banking firms. Most of these loans are for loan amounts above 417,000 and they have a little tighter underwriting guidelines attached to reduce the banks exposure to risk.
Ron Yarbrough's (NMLS #263379) Personal Mortgage Information. I believe that though information and proper planning anyone can benefit from a mortgage. A mortgage is an investment not a debt. I will continue to monitor my client's mortgage forever and will always teach consumers how to become the bank. The sooner you can borrow from yourself the better off you will be when you retire. Debt free really has several different meanings. Ask me.
