Government-guaranteed loans are designed with quite low borrow limits, as the lenders have a restricted supply of money to contribute towards the housing market. These issues were surmounted by the loan limit extensions created by Fannie Mae and Freddie Mac.
The two entities are private corporations which offer Conventional loans in the states, including Illinois.
Fannie Mae, officially known as the Federal National Mortgage Association, was created to resolve property-loan lending issues in 1938. Freddie Mac, officially known as the Federal Home Loan Corporation, was formed in 1970. These entities reduce the concern of money shortage by reimbursing the banks for the money they loan to homebuyers in Illinois, and paying a commission.
e-Finance Mortgage LLC is proud to offer exceptional conventional loan rates to buyers in Illinois.
Conforming and Non-Conforming
The first classification of conventional mortgage is the conforming loan. Conforming loans comply with the lending standards of Fannie or Freddie, which consider a loan eligible only if it satisfies their standards.
The second classification, the non-conforming loan, does not adhere to any lending limits. A conventional loan considered non-conforming if is over $424,100. In some high-costs districts of Illinois, this minimum may be raised as high as $636,150.
IL Conventional Loan Requirements
In Illinois, conventional loan borrowers have to fulfill 20% of purchase price as down payment. However, the continuing mortgage crisis in the recent years has reduced down payment limits to 3% for some areas.
A buyer who makes 20% of down payment is no longer required to deliver private mortgage insurance (PMI). However, those who opt to make a lesser down payment have to carry out PMI till fulfilling 20% equity.
IL Conventional Loan Options
Options for conventional loans encompass fixed-rate, adjustable-rate, and even a merge of the two (hybrid).
FRM (Fixed-rate Mortgage) – in this option, the mortgage amount remains unchanging till loan expiration, regardless of varying market rates. FRM loan durations are categorized into 15 years, 20 years and 30 years loan durations.
ARM (Adjustable-rate Mortgage) – this option is dependent on changing market rates. Buyers who opt for ARM benefit by starting out with rates lower than those in FRM, and can successfully gain refinancing in the future.
At e-Finance Mortgage LLC, we provide some of the best conventional loan rates and terms in Illinois. This loan allows borrowers with strong credit to benefit from Fannie Mae’s or Freddie Mac’s lending limits.
We offer both financing and refinancing options in the state. Contact us today to learn about the extent of our conventional loan services.