Prime Conforming


DEFINITION of 'Prime Conforming'

A sector of mortgage lending made up of loans to borrowers who are considered to be of a high credit quality, and where the dollar amount of the mortgage is equal to or less than the conforming loan limits set by the Office of Federal Housing Enterprise Oversight (OFHEO).

BREAKING DOWN 'Prime Conforming'

Most prime conforming mortgages are considered conventional mortgages. A mortgage can be prime and below the conforming loan limits, but it will be considered non-conforming if it has certain characteristics, such as a negative amortization feature.

Prime conforming mortgages offer the lowest interest rates available to borrowers, except for the teaser rates that might be available on non-conforming mortgage products.

  1. Conforming Loan

    A mortgage that is equal to or less than the dollar amount established ...
  2. Teaser Rate

    An initial rate on an adjustable-rate mortgage (ARM). This rate ...
  3. Prime

    A classification of borrowers, rates or holdings in the lending ...
  4. Conventional Mortgage

    A type of mortgage in which the underlying terms and conditions ...
  5. Negative Amortization

    An increase in the principal balance of a loan caused by making ...
  6. Encumbrance

    A claim against a property by a party that is not the owner. ...
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  1. How many FHA loans can I have?

    Generally, the Federal Housing Administration (FHA) does not insure more than one mortgage per borrower. This is to prevent ... Read Full Answer >>
  2. Are FHA loans assumable?

    Loans insured by the Federal Housing Administration (FHA) on or after Dec. 15, 1989, are assumable by qualifying borrowers. ... Read Full Answer >>
  3. How accurate are online mortgage calculators?

    Online mortgage calculators are accurate to the extent that the calculator itself is asking for the right pieces of information ... Read Full Answer >>
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