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Have you ever wondered what exactly is up with
countrywide home loan mortgage rate credit
Fannie Mae And Freddie Mac Mortgage Loans - Conforming Loans Provide Low Interest Rates
Conforming loans provide low interest rates since they are almost guaranteed to be purchased by Fannie Mae or Freddie Mac, which allows more funds to be available for borrowers. However, these corporations have terms, such as maximum loan, that limit how much you can borrow. If you don't meet their terms, you will need to apply for a non-conventional loan with slightly higher interest rates.
Loan Purchasers
Fannie Mae and Freddie Mac are stockholder owned companies that purchase mortgages, package them into securities, and then resells them to investors. This allows banks and other financing companies to lend to more customers since their capital is not tied up in long-term loans.
Fannie Mae and Freddie Mac have strict requirements for purchasing loans. Basically, they want to reduce their risk level so they put a cap on loan amounts, credit score, income level, and down payment.
Conforming Loan Amounts
Each year Fannie Mae and Freddie Mac create new guidelines for loan amounts. In 2005, a mortgage limit for a single-family dwelling is $359,650. Limits for multiple family dwelling are significantly higher, roughly an additional $100,000 per family. Maximum loan amounts are also 50% higher in Alaska, Guam, Hawaii, and the Virgin Islands since property prices are higher.
Second mortgages also have their limit. In 2005 the limit was $179,825, but the total mortgaged amount of both loans could not exceed $359,650. As with first mortgages, second mortgages can also be 50% higher in designated areas.
Non-Conforming Loans
There are other loan options if you don't qualify for a conforming loan. If you need to borrow more than the maximum conforming loan amount, then you will want to apply for a jumbo loan. Because these types of loans are handled on a smaller scale, their rates are slightly higher than a conforming loan.
If you have poor credit or little down payment, you can use a subprime lender who specialized in lending to B/C type loans. You can expect to pay higher rates with these lenders, but many offer favorable terms. To find the best deal and to avoid scams, you must research your lender. Compare rates and terms until you find a favorable financing package.
About the author:
See my recommended Home Mortgage Lenders online for the lowest rates possible. Carrie Reeder is the owner of ABC Loan Guide, which offers help finding the best home mortgage loans.
More Useful Resource and Updates on countrywide home loan mortgage rate credit
- Bank of America creates home retention program for Countrywide customers (Banking Business Review)
Bank of America has announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for nearly 400,000 Countrywide Financial customers across the US.
- Countrywide settles suit, offers direct loan relief (The Charlotte Observer)
Countrywide Financial has agreed to the largest program ever to modify home loans, as part of a settlement with officials in North Carolina and 10 other states, just days after the federal government adopted a giant financial rescue package without any relief for distressed homeowners. Countrywide, the nation's largest lender and loan servicer, recently acquired by Bank of America, had been sued ...
- Westpac cuts home loans by 80bp (Daily Telegraph)
WESTPAC says it will cut its standard variable home loan rate by 80 basis points.
- TD boosts home equity loan rates (London Free Press)
TORONTO -- One of Canada's biggest mortgage lenders, TD Canada Trust, is increasing the interest rate charged for its home equity line of credit and variable-interest mortgages.
- Westpac cuts home loan rate by 0.8% (The West Australian)
Westpac Banking Corporation has reduced its standard variable home loan rate by 80 basis points to 8.56 per cent, passing on most of the Reserve Bank of Australia's (RBA) cut in the overnight cash rate.
- Home loan rates topple (Daily Telegraph)
LENDERS are cracking under the pressure of today's massive official rate cut, passing on reductions of up to 0.8 per cent on standard variable home loans.
- Westpac and Aussie make big rate cut (Sky News Australia)
Westpac Banking Corporation has reduced its standard variable home loan rate by 80 basis points to 8.
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