Latest news with #FederalHousingFinanceAgency
CNBC
2 days ago
- Business
- CNBC
FICO CEO on criticism from FHFA's Bill Pulte
William Lansing, FICO CEO, joins CNBC's 'Squawk on the Street' to discuss criticism from Federal Housing Finance Agency director Bill Pulte, alleging FICO is a monopoly.
Yahoo
4 days ago
- Business
- Yahoo
Jumbo vs. conventional loans: What's the difference?
Key takeaways A jumbo loan is actually a type of conventional loan — just bigger than usual, as the name implies. Because they exceed the loan limit set by the Federal Housing Finance Agency (FHFA), jumbo loans are considered nonconforming and have stricter lending guidelines. Conforming loans of lower amounts have less stringent credit criteria and lower down payment requirements. Overview: Jumbo loans vs. conventional loans A conventional loan is a mortgage that's originated and financed by a private lender, rather than the federal government. By that definition, a jumbo loan can actually be a type of conventional loan, so it's not exactly an apples-to-apples comparison. A better comparison might be jumbo conventional loans, which are nonconforming, versus conforming conventional loans. Shop Top Mortgage Rates Personalized rates in minutes A quicker path to financial freedom Your Path to Homeownership Conventional mortgages can be either conforming or nonconforming. A conforming mortgage meets the requirements set by the Federal Housing Finance Agency (FHFA) — the most common of these stipulates that the size of the loan be set at or below certain dollar limits. These limits vary from state to state, and even by counties within states. For 2025, the conforming loan limit is $806,500 in most areas, and up to $1,209,750 in higher-priced places. When a mortgage is conforming, it is eligible for Fannie Mae and Freddie Mac to buy on the secondary mortgage market. Knowing that these government-sponsored entities, major players in the mortgage industry, can purchase a mortgage greatly reduces a lender's risk in offering it. A jumbo loan is a conventional loan, but since it doesn't conform to the FHFA standards due to its size, it's considered nonconforming. If you're financing the purchase of a high-priced home, a jumbo loan can allow you to borrow the amount you need, even if that amount is higher than the conforming loan limit. Many mortgage lenders offer jumbo loans up to $3 million or $5 million. You might be able to find jumbo loans in even higher amounts, especially if you work with a mortgage broker who's a jumbo specialist. Key differences between jumbo and conforming loans While jumbo and conforming loans are both conventional loans, there are some significant differences to be aware of. Jumbo loans Conforming loans Minimum credit score 700 620 Minimum down payment 20-25% 3-5% Minimum DTI ratio 36-43% 43-50% Cash reserves Up to 12 months Up to 6 months Rates Higher due to elevated risk Could be lower, depending on your financial profile Qualifying for a jumbo loan While there are several qualifying factors that impact whether you can get a jumbo loan, the most important is your credit score. The minimum required is higher, for a start: 700 for a jumbo, as opposed to 620 for a conforming conventional loan. And while you can qualify with the minimum credit score, the best mortgage rates go to borrowers with scores of 740 or higher. You should also be prepared to make at least the minimum down payment — which, not surprisingly, is typically a larger percentage of the purchase price than for a conforming conventional loan. And you'll also need to meet the lender's debt-to-income (DTI) thresholds, which tend to be lower (that is, take up less of your monthly earnings). It's possible, eventually, to refinance a jumbo loan into a conventional conforming loan — provided the jumbo's remaining balance is at or below your area's conforming loan limit. Mortgage rates for a jumbo loan Many jumbo loan rates may actually be lower than those on some conforming loan offers, since lenders still want to remain competitive. Otherwise, jumbos tend to be influenced by the factors that move mortgage rates and interest rates in general, such as the benchmark federal funds rate the Federal Reserve sets. The particular interest rate you'll get, of course, depends on your personal financial circumstances. Most jumbo loans are conventional loans backed by private lenders. However, jumbo FHA and VA loans do exist — the maximum amount you can borrow may not be as big as that of conventional jumbos, though. Deciding which loan is right for you Jumbo and conventional conforming loans each have unique purposes, so it's important to choose the right one for your situation and financing needs. You might benefit from a jumbo loan if: You are purchasing a high-priced home You are purchasing in an area with a high cost of living You have a high income and an excellent credit score Your monthly debt load is low You can make a down payment of 20 percent or more A conforming loan may be a better option if: You are purchasing a moderate home, priced within the local loan limits You have a lower income Your credit score is just 'good' or 'fair' You have little savings or financial assets You have limited funds available for a down payment FAQs Are jumbo loans more difficult to qualify for? Yes — the lending criteria for jumbo loans are tighter than for conforming loans, mainly because the loan amounts are higher. In addition, they pose an elevated risk to lenders, because they can't be sold on the secondary mortgage market as easily. Is mortgage insurance required for jumbo loans? Not usually, because most lenders require a down payment of at least 20 percent to get a jumbo loan. Since that 20 percent threshold is met (or exceeded), private mortgage insurance is not required. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
6 days ago
- Business
- Business Insider
FHFA director Pulte says Fed chair Powell may be indicted over alleged perjury
U.S. Director of the Federal Housing Finance Agency William Pulte said in a post on X, formerly Twitter, 'I am told by very reliable Congressional sources that there may be a criminal referral coming from one or more Congress members to the DOJ for Jay Powell's alleged perjury about the $2.5BN building.' Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Wall Street Journal
6 days ago
- Business
- Wall Street Journal
The Home-Builder Heir Who Is Stoking the Jerome Powell Frenzy
The Federal Housing Finance Agency, created in 2008 to oversee mortgage giants Fannie Mae and Freddie Mac, has historically been a sleepy agency run by a relative unknown. Bill Pulte is turning that on its head.
New York Times
6 days ago
- Business
- New York Times
Will Investors Ever Believe Trump's Threats Against Powell?
Andrew here. What would happen if President Trump actually tried to fire Jay Powell, the Fed chair? Trump has been publicly toying with the idea — and then denying he will do it. Investors and analysts have been gaming out what would happen to bonds, the dollar and stock prices. Despite vocal calls about the importance of an independent Fed, the prevailing wisdom appears to be that the immediate impact of firing Powell might not be a shock to the system but more of a gradual shift in how global investors think about the U.S. Let me know what you think might happen in practice. Trump and 'the concept of firing' Powell Stock futures and the dollar are looking relatively stable this morning despite the latest — and perhaps most ominous — threat yet by President Trump against Jay Powell, the Fed chair. Investors may be playing down the chances that the president will actually try to remove Powell, a task that experts still say would be legally knotty. And it's certainly possible that Trump is just venting that the Fed isn't lowering rates fast enough or can continue to be dissuaded from acting. But at some point, will investors take the president's threats seriously? What Trump did: While Trump denied brandishing a draft letter firing Powell as Fed chair at a meeting with House Republicans on Tuesday, The Times reports that he had, with the draft provided by William Pulte, the director of the Federal Housing Finance Agency. The president said he 'talked about the concept of firing' Powell, and that almost everyone at the meeting said he should. (He said on Wednesday that he was considering choosing Kevin Hassett, a close economic adviser, to be the Fed's next chair.) But Trump said he had no imminent plans to fire Powell — 'unless he has to leave for fraud,' citing a multibillion-dollar renovation of the central bank's headquarters that has become a focus of conservative criticism. Want all of The Times? Subscribe.
