Mortgage Rates
Conforming
Loans
A lender that makes
a loan either keeps the loan in its portfolio or sells the loan in the
secondary mortgage market. Loans
that the lender keeps, does not
sell, are called Portfolio Loans. Loans that the lender sells are called
nonportfolio loans.
Conforming
Loans are conventional loans that meet the underwriting standards for
purchase by Fannie Mae or Freddie Mac. Those loans are written for 15 year
or 30 year terms and are not assumable. They have strict guidelines
regarding down payments and maximum amounts. Because of their strict
underwriting requirements, the interest rates for conforming loans are
generally less than rates charged for nonconforming
loans.
