Denver, Colorado Home Loans
There are many different kind of home loans, and depending on your goals we may recommend a different option for you. Learn some of the common differences below, and then contact our office to discuss in further detail. Not every loan type is right for every person; let us be the experts you trust to help you reach your goals!
Conventional Home Loans
Conventional home loans are mortgage loans offered by non-government sponsored lenders (government sponsored includes: VA, FHA, USDA, and Rural Development loans). They are not insured or guaranteed by the federal government. In general, conventional loans are protected by Fannie Mae & Freddie Mac which are stockholder-owned corporations and are not part of the federal government.
Conventional loan types include:
- Fixed Rate
- Adjustable Rate Mortgages (ARMs)
- Combination (Hybrid) Loans
- Balloon Mortgages
- Reverse Mortgages
At one time in the United States, conventional home loans were the only mortgage loans available and they were all issued by local lenders such as banks, savings and loans, and credit unions. These private lenders kept and serviced these loans in their own financial portfolios until the loan was paid off.
Around 1938, a secondary market was created which allowed these local lenders to sell their loans, getting the full payment much more quickly. Then, the different organizations that purchased the loans owned the loan agreement and collected payments from the borrower. Even today it is very common for lenders to sell their loans on the secondary market.
What is a Jumbo Loan?
Jumbo Loans go over the maximum loan amounts established by Fannie Mae and Freddie Mac conventional loan limits (thus called non-conforming loans). The rates on jumbo loans are typically a little higher than conforming loans. Jumbo Loans are most commonly used to buy more expensive homes and high-end custom construction homes.