Where readers ask and we try to answer:
I am 75 about to refinance with Bank of America. What is a 30 year conforming fix rate mean? That word conforming scares me as we are on a small income.
Tim Wood answers:
A conforming loan is one backed by Fannie May or Freddie Mac with a loan limit of $417,000. As a result of backings by these two government agencies, lenders are able to offer you, the consumer (borrower), better rates on these products. The word conforming as it relates to your loan is a positive.
And as mentioned here, there is talk of raising the conforming limit, which would make the word conforming even more of a positive. However, it appears this part of the economic stimulus plan may be getting cut.
I work for BOFA and is also refinancing but with another company that is using that terminally. Thank you for putting my mind at rest, for I did not feel comfortable with the term conforming fix rate, even thought it says fixed.