Conventional is the best loan program for someone who does have a strong credit score and more available for a down payment and who has stronger income therefore lower debt ratio.
Buyers who are a little more established meaning that they have more saved or have increased their salary and lowered their debts somewhat will usually prefer a conventional loan over an FHA.
The rates are similar but with a conventional, even if you do need PMI(Private Mortgage Insurance) because you don't have at least 20% equity, the PMI can usually be cancelled if you do eventually build up to 20% equity.
Also, the appraisal for conventional only establishes value meaning it does not consider the condition of the property. This makes the appraisal a little bit faster and can be seen as one less hoop for the seller to jump through.
If the seller is receiving multiple offers they are much more likely to go with the Conventional offer over the FHA!
This is because of the easier appraisal and also because the seller wil likely believe the buyer is stronger financially if they are approved for conventional meaning it is less likely to not close.
Not every lender takes full advantage of today’s technology. This can make the process feel frustrating and slow at times.
At Groves Capital we focus on taking a complete loan application up front. Then we submit your application to automated underwriting. What this means to you is that we can get a solid, underwritten approval for you quickly and we also know exactly what documentation we will need to get you approved. This means you only need to gather and submit documentation one time instead of being strung along with endless requests for additional things.
We also use technology when it comes to the application itself. This allows you to apply online whenever it works best for you and allows you to electronically sign your documents and submit application documents to us electronically eliminating the need to physically print and bring items into our office.