| Sub-prime mortgage loans offer more flexibility than | | | | history. |
| their conventional mortgage loan cousins. With terms | | | | The Options Of A Sub-Prime Loan |
| determined by Freddie Mac and Fannie Mae, | | | | Sub-prime home loans provides financing for those |
| conventional loans have strict guidelines on loan | | | | with poor credit or unusual application terms. This can |
| amounts, terms, and PMI requirements. With sub-prime | | | | include jumbo loans, exceeding the limits of a |
| mortgages, lenders can provide more choices with an | | | | conventional loan. People with unusual or unpredictable |
| increase in rates. | | | | jobs may also find an easier time getting financing with |
| The Limits Of A Conventional Loan | | | | a sub-prime lender. |
| Conventional loans are often sought for their low rates. | | | | Sub-prime mortgage terms are determined by the |
| But those low rates come with limitations. Freddie Mac | | | | individual lender. So you can get a zero down loan with |
| and Fannie Mae buy mortgages after they have been | | | | a poor credit score. You can also find near market |
| processed by a financial company. This frees up | | | | rates by placing a large down payment at closing. |
| money for the lender to make more loans. However, | | | | Private mortgage insurance is not required with a |
| Freddie Mac and Fannie Mae have tight guidelines on | | | | sub-prime mortgage, potentially saving you hundreds a |
| what types of loans they will purchase. | | | | year in premium costs. |
| Among these limitations are caps on loan amounts. In | | | | Getting The Right Mortgage For You |
| 2006 the limits were set at $417,000 for a single family | | | | Most financing companies handle both types of loans, |
| house. Every year these caps are reevaluated. | | | | so you can easily get quotes for both types. To find |
| Conventional home loans also require you to carry | | | | the right mortgage, you have to take the time to |
| private mortgage insurance if you borrow more than | | | | crutch the numbers. |
| 80% of the homes value. | | | | Look at the APR to determine the total cost of the |
| To qualify for a conventional mortgage, you must have | | | | loan. But also factor in any plans to move or refinance |
| good credit, cash assets, and steady employment | | | | in the future. |