Are you missing out on the benefits of conventional financing?

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Recently, we spoke of FHA financing. Today, we shift our attention to conventional financing and the benefits of it over FHA financing. Many people are unaware they can secure conventional financing for as little as 5% down. What are the other benefits?

1. Credit score doesn't need to be excellent: You can secure conventional financing with a credit score around 680! 
2. FHA requires a monthly premium: With an FHA loan you have to put 3.5% down. However, it requires you to pay 1.75% up front for a mortgage premium at closing, which makes your down payment 5.25%. Typically, buyers finance that mortgage premium into their loan - with conventional financing you don't have to worry about this up front fee.
3. FHA monthly PMI is almost double that of conventional financing: Combine that with the the mortgage premium you have to pay and you can really start to see fees add up.
4. 95% of condo and town home buildings are not FHA approved. Putting 5% down on a conventional loan allows you to purchase with a low down payment instead of having to put down the much higher 20% down payment.

As you can see, conventional financing allows buyers to be more flexible and affords them more opportunities that would not otherwise exist. It's a great program - especially if you're interested in a condominium.

Do you have questions about the differences between conventional and FHA financing? Don't hesitate to give us a call or shoot us an email. We are proud to be your number one Porter Ranch area real estate resource!