NON-CONFORMING MORTGAGE LOANS

A Non-conforming Mortgage Loan is a loan that does not conform to the guidelines established by Fannie Mae or Freddie Mac. Non-conforming loans typically have :

• Higher interest rate
• Different requirements for down payment

Non-conforming Mortgage Loan Programs are:

1. Jumbo Mortgage Loans

   Jumbo Mortgage Loans are mortgage loans that are larger than the conforming loan limit. Generally, they have a higher interest rate than conforming mortgage loans. The single-family limit changes annually.
   1. Benefits:
      1. People can buy larger and/or more expensive homes.
   • Warning:
   • Higher interest rates,
   • Higher monthly payments,
   • Higher closing cost.

    

2. B/C Mortgage Loans (Imperfect Credit Loans)

   Loans that do not meet the credit quality of conforming loans ('A' paper)
   1. Benefits:
      1. Potential for re-establishing credit if the monthly payments are paid on time;
      2. People with imperfect credit can buy a home
   • Warning:
     • Higher interest rates,
     • Higher monthly payments,
     • Higher closing cost,
     • Higher down payment and
     • May have prepayment penalties.

1. Foreign National Mortgage Loans

   The Foreign National Mortgage Loans are designed for foreign national buyers. No employment, income or credit history information can be verified. Approval is based on down payment, current financial picture, and property value.
   1. Benefits:
      1. No income verification,
      2. No employment verification,
      3. Fast approval .
   • Warning:
     • Higher interest rates,
     • Higher down payment required,
     • Terms may not be as favorable
     • The loan may have prepayment penalties