Until then, you receive regular payments in the amount set up in the terms of the loan. Reverse mortgages are offered by state and local governments as well as banks and mortgage lenders. Shop carefully for these loans because interest rates and fees tend to be higher than in traditional mortgages. The aarp web site offers additional information about reverse mortgages. Conventional versus jumboa conventional loan is one that falls under the loan limit set by fannie mae or freddie mac. These limits change annually based on the single-family home price survey done by the federal housing finance board each october. As of 2002, a conventional loan can be up to $300,700. Loans that are above that limit are called jumbo loans. Because jumbo loans don't offer the same fannie mae- and freddie mac-backed safety to investors as conventional loans, their interest rates tend to be higher by about 0. 25 percent to 0. 50 percent. When the conventional loan limit changes, the fha loan limit usually changes along with it. The aprprobably one of the most confusing things about mortgages and other loans is the calculation of interest. With variations in compounding, terms, and other factors, it's hard to compare apples to apples when comparing mortgages. Sometimes it seems like we're comparing apples to grapefruits. For example, what if you want to compare a 30-year fixed-rate mortgage at 7 percent with one point to a 15-year fixed-rate mortgage at 6 percent with one-and-a-half points.

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