Non-Conforming Mortgage Loans and why You might need one in Louisville The words "non-conforming mortgage loan” may sound a bit disconcerting and make you wonder what it doesn’t conform to. In short, they don’t conform to the requirements set forth by government agencies requirements that purchase conforming loans, such as Fannie Mae or Freddie Mac. Non-conforming mortgage loans fail to meet a lender’s criteria for funding. This is due to one of three reasons: ● the amount of the loan is higher than the loan limit ● the borrower’s credit score isn’t high enough ● there isn’t sufficient collateral for backing the loan So why would you need a non-conforming loan? There are a few factors that indicate the need for a non-conforming versus a conforming loan as follows: ● You’re getting a “jumbo mortgage” in an amount that is higher than the limit of a conforming loan ($548,250 or $822,375 in high-cost areas). In most cases, you’ll need a jumbo mortgage if you’re planning on purchasing a high-end property. ● You’re purchasing a condominium or townhome and the complex is categorized as being non-warrantable. ● Your credit score is too low to meet the requirements for a conforming loan or you have an unacceptable DTI (debt-to-income ratio). Although a conforming loan is the best option for borrowers, you may need a jumbo or non-conforming mortgage loan in higher cost areas. https://www.google.com/maps?cid=9756245033103121757