Definition
A mortgage that does not meet the guidelines set by Fannie Mae and Freddie Mac for purchase on the secondary market. Non-conforming loans include jumbo loans (exceeding conforming limits), loans with non-traditional documentation, and loans for unique property types. Because they cannot be sold to GSEs, non-conforming loans may carry higher interest rates and stricter qualification requirements, though the gap has narrowed significantly.
Related Mortgage Terms
- Conforming Loan
A mortgage that meets the guidelines set by Fannie Mae and Freddie Mac, includin...
- Jumbo Loan
A mortgage that exceeds the conforming loan limits set by the Federal Housing Fi...
- Secondary Market
The market where existing mortgages are bought and sold between lenders, investo...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.