Unformatted text preview: processing time on a conventional loan is usually less than for a government insured or government–guaranteed loan. Under normal circumstances, the originator of the conventional loan has been given the underwriting guidelines of the investor and is allowed to approve any loan that, in the opinion of the originator, meets the guidelines. This is even true for conventional loans that are to be sold to Fannie Mae. This allows a lender to give in–house approval on Fannie Mae loans. The actual processing time for a conventional loan can take around 30 days, or sooner if all of the information to be verified is from local sources in an active real estate market. This can be protracted considerably. With automated (computerized) underwriting a conventional loan can be approved in as little as one week and even less. It is difficult to get that type of quick service from government programs. Usually, government agencies do not have the flexibility in their procedures that a conventional lender enjoys. This faster processing time is one of the major factors that will make the conventional mortgage more attractive to your clients. Loan amounts – Unlike government loans, the conventional loans or lenders have no set loan limits. This limit is usually set by the investor of
Dynasty School (www.dynastySchool.com) 6-11 REAL ESTATE FINANCE
the lender, unless the loan is sold off in the secondary market, as discussed in Chapter 7. But FHA sets maximum loan amounts on a home loan depending on geographical location. The DVA has no dollar loan maximum, but individual lenders do limit the veteran's loan amount because the DVA guarantees only part of the loan. Cal–Vet's maximum loan on a single–family dwelling is limited and can vary from year to year. Dollar limits on government–backed loans were covered in Chapter 5. Flexibility of lenders – When a lender keeps a loan, instead of reselling it in the secondary market, it is called a portfolio loan. Many portfolio lenders will make these...
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