Conventional Mortgage

New Jersey’s leading low rate provider of conventional financing for the past 30 years.

Conventional loans are mortgages that meet bank-funding criteria set by Fannie Mae (FNMA) and Freddie Mac (FHLMC). Both of these stock-holding companies buy mortgage loans from lending institutions and secure them for resale to the investment community. Every year, form October to October, Fannie Mae and Freddie Mac establish limits on what constitutes a conforming loan in a mean home price. Buying back mortgage loans allow these agencies to provide a continuous flow of affordable funding to banks that reinvest their money back into more mortgage loans. Fannie Mae and Freddie Mac only buy loans that are conforming, to repackage into the secondary market – effectively decreasing the demand for non-conforming loans.

With a fixed rate mortgage, the interest rate does not change for the term of the loan, so the monthly payment is always the same. Typically, the shorter the loan period, the more attractive the interest rate will be. Payments on fixed-rate fully amortizing loans are calculated so that the loan is paid in full at the end of the term. In the early years of a mortgage, a larger percentage of the mortgage payment is applied towards the interest.  The reason this occurs is that more interest is due each month when the outstanding loan balance is higher.  As the outstanding mortgage balance is reduced, more of the monthly payment will be applied toward the principal. A 30 year fixed rate mortgage is the most popular type of loan which allows for our borrowers to lock into a low rate which remains fixed for 30 years.The Loan Tree Fixed Rate Mortgage Options:

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