Understanding Conventional & Jumbo Mortgages

    Do you have a 5% or greater down payment, PERFECT credit and you can document your income? If so, a conventional (Fannie Mae or Freddie Mac Conforming) loan is probably the best option for you. If not, you may want to look at a FHA or Federal Housing Authority loans, a 100% RD or USDA Rural Development loan, or if you are a veteran or spouse of a veteran a  VA or Veteran Administration loans may be the best option.

    Conforming loans tend to offer the homebuyer the lowest rates and mortgage insurance expenditures. The current maximum loan amount for a single family residence in the State of Louisiana is $424,100.  A homebuyer seeking to purchase a duplex will have a maximum loan amount of $533,850, a triplex is $645,300 and the maximum loan for a four-plex purchase is $801,950. For larger home purchases that exceed $417,000 the borrower would need to apply for a Conventional/Jumbo Loan. Since there is no private mortgage insurance (PMI) on Jumbo Loans, they tend to require stricter credit and income requirements and a larger down payment.

    Conventional (or conforming) loans and Jumbo Loans allow the borrower the most amount of options when it comes to fixed or variable rate programs. The borrower can choose a 30 year fixed rate, 15 year fixed rate or one of several shorter term fixed rate periods. These may be 7 year fixed, 5 year fixed or 3 year fixed. These shorter term fixed rates can also be amortized over 10 years, 15 years, 20 years or 30 years. These shorter term programs allow a borrower who may not intend to live in a property for an extended period the option of reducing their interest expense based on the shorter time they need the mortgage.

    These loans tend to be written by local banks and direct mortgage lenders. Since most banks charge an application fee to even determine if a borrower qualifies for these programs, we recommend a direct lender who never charges our clients upfront fees!

    Client Testimonials

    Brandon was very helpful during my home search. He was quite resourceful and responsive. I would highly recommend him if you’re looking to purchase or sale your home.
    C. Washington, Baton Rouge LA