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.

RELATED TERMS
  1. Conforming Loan

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  2. Prime

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  3. Teaser Rate

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  4. Conventional Mortgage

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  6. Balloon Payment

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