[Gustan Cho]

Without Fannie Mae and Freddie Mac, housing prices would not be at a stabilized value like it has been for decades. Fannie Mae and Freddie Mac are part of the federal government, nor is it backed by government agencies like FHA, VA, and USDA loans. The two mortgage giants are government-sponsored enterprises (GSEs), the two largest purchasers of mortgage-backed securities. Fannie Mae and Freddie Mac will purchase mortgage loans from private lenders to keep liquidity in the mortgage markets.

 

[Gustan Cho]

Fannie Mae and Freddie Mac are the two mortgage giants in the nation in charge of buying mortgages on the secondary market. Without Fannie Mae and Freddie Mac, mortgage lenders would not be able to offer mortgage loans with low down payment at low rates.

[Gustan Cho]

Many borrowers are under the impression you need perfect credit to qualify for conventional loans. This is not the case. You need to have a minimum credit score of 620 FICO to be eligible for conventional loans.

[Gustan Cho]

The mortgage process is a proper step-by-step process with no shortcuts. The mortgage process starts with the applicant completing a 1003 mortgage loan application with the help of a loan officer. The loan officer then issues a pre-approval letter if the borrower meets all the credit and income requirements. The borrower shops for a home and enters into a real estate purchase contract. The mortgage process then officially begins. The mortgage processor processes the loan for the underwriter. The underwriter will issue a conditional loan approval if the borrower meets the guidelines. The processor and loan officer gather conditions for the underwriter. Once the borrower meets all conditions, the underwriter will issue a clear to close. The lenders closing department works together with the title company to prepare the closing. Keys and money from the lender exchange hands. The borrower becomes a homeowner.