Conventional Mortgage
Author: Terri Ewing | Date: August 28, 2008 | Filed In: Glossary
Conventional Mortgage Defined
A conventional mortgage is a mortgage that follows the loan limit, pricing, and underwriting guidelines of Fannie Mae and Freddie Mac. and are insured by one of the same two companies. These mortgages are not, subprime, FHA or VA mortgages. FHA and VA mortgages are insured by the government directly through Ginnie Mae.
Conventional mortgages are the “bread and butter” of the mortgage industry. Until recently, conventional mortgage made up over 80% of all loans originated. The recent subprime mortgage boom skewed the numbers until that market went bust. And now, FHA is capitalizing on refinancing many subprime borrowers, so the FHA originations are temporarily up now too.
Author: Terri Ewing
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