CONVENTIONAL MORTGAGE
The most widely used mortgage in America, built for buyers with steady income and solid credit. No government overlays, no surprise conditions — just a straightforward loan structured around how long you plan to own the home.
Straight math on which loan structure actually costs you least.
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Conventional financing is not backed by a government agency, which means fewer program restrictions and, for most well-qualified borrowers, a lower lifetime cost than an FHA loan.
Unlike FHA, there is no upfront mortgage insurance premium. Once you reach 20% equity, private mortgage insurance can usually be removed entirely — something FHA mortgage insurance does not allow on most loans.
Qualified buyers can purchase with as little as 3% down. Larger down payments reduce your monthly cost and eliminate PMI from day one.
Primary residences, second homes, and investment properties all qualify. Government programs generally restrict you to a home you will live in.
Fewer agency-specific conditions means fewer places for a file to stall. In a market where sellers weigh certainty as heavily as price, that matters.
A conventional loan is largely the same product wherever you get it. What differs is whether the person handling it answers the phone in October when your appraisal comes in low.
The Arrowood Team offers a $5,000 Closing Guarantee. After a fully underwritten pre-approval we can issue a guarantee certificate, and if the loan does not close, Tim pays $1,000 to the borrower and $4,000 to the seller. Eligibility depends on the transaction — ask us whether it applies to yours, or read the full terms on our Closing Guarantee page. It makes your offer materially stronger than a standard pre-qual letter.
The national average purchase closes in about 45 days. Our process is built to close in 21 to 30, which is often the difference between winning a multiple-offer situation and coming second.
We are at 119 Boone Ridge Dr in Johnson City. Tim Arrowood (NMLS #393468) personally works your file. No transferred queues, no loan officer who has moved on by underwriting.
Whether 3% or 20% down is right for you, whether to buy the rate down, whether a 15-year term actually fits your budget — you get a real recommendation, not whichever option pays the most.
Borrowers with identical incomes often need very different loan structures. These are the four we set up most often in the Tri-Cities.
Gets qualified buyers into a home sooner and keeps cash in reserve for moving, repairs and the first few months of ownership. PMI applies until you reach 20% equity, and it can be removed after that.
Lowest monthly payment and no mortgage insurance from day one. Worth running the numbers both ways: sometimes keeping the cash and paying PMI for three years is the better financial decision.
Builds equity substantially faster and cuts total interest paid. The payment is higher, so we stress-test it against your actual budget before recommending it.
Conventional is usually the most flexible route for a vacation home on the lake or a rental. If the property will be a 1–4 unit rental, ask us about DSCR financing as an alternative.
Conventional lending is national, but the deals are local. What a $340,000 offer means in Johnson City is not what it means in Kingsport, and appraisers price them differently.
Johnson City. The tightest inventory in the region and the most multiple-offer situations. A fully underwritten pre-approval is doing more work here than anywhere else in the service area.
Kingsport and Bristol. A different price band and a slower pace, and in Bristol you may be comparing homes on both sides of the state line — which changes taxes and insurance, not just the loan.
Jonesborough and the smaller towns. Older housing stock is common. Conventional appraisals can flag deferred maintenance that a renovation loan would absorb instead; we will tell you before you are under contract, not after.
Southwest Virginia. We are licensed in Virginia and close there regularly. Rural properties on acreage need different comparable sales, which is worth knowing before you make an offer.
General guidelines, not hard rules — a strong file in one area often offsets a weaker one in another.
Not sure where you land? Call (423) 406-1567 and we will tell you honestly, including if the answer is “not yet.”
1. How much do I actually need to put down on a conventional loan?
As little as 3% if you are a qualified first-time buyer, and 5% is typical for repeat buyers. You do not need 20% — that threshold only determines whether you pay private mortgage insurance. In the Tri-Cities we routinely close conventional purchases in the 3–10% range. Call (423) 406-1567 and we will run both scenarios against your actual numbers.
2. Conventional or FHA — which is better for me?
If your credit is above roughly 680 and your debt-to-income is reasonable, conventional usually costs less over the life of the loan because the mortgage insurance is removable. If your credit is in the low 600s or you need more flexible debt ratios, FHA often wins. We run both and show you the comparison. See our FHA guide for Johnson City for the other side of that decision.
3. When can I get rid of PMI on a conventional loan?
Generally once you reach 20% equity you can request removal, and at 22% it is typically scheduled to drop automatically. Equity from appreciation can count, though that usually requires a new appraisal. This is one of the biggest structural advantages conventional has over FHA.
4. What credit score do I need?
Most conventional programs start at 620. But the score does more than qualify you — it prices your rate and your PMI. Moving from 680 to 740 can change your monthly payment noticeably on the same loan amount. If you are close to a threshold, we will tell you what it would take to get there before you apply.
5. Can I use a conventional loan for a rental or second home?
Yes, and it is usually the most flexible option. Expect a higher down payment requirement for investment property. For 1–4 unit rentals where the rental income matters more than your personal income, ask about DSCR loans.
6. How long does a conventional loan take to close?
We target 21 to 30 days from contract, against a national average of about 45. Getting fully underwritten before you make an offer is most of the reason we can do that.
Tennessee: Johnson City, Kingsport, Bristol, Jonesborough, Elizabethton, Greeneville, Piney Flats, and the surrounding Tri-Cities.
Virginia: Bristol and Southwest Virginia along the I-81 corridor.
Preferred Rate is licensed in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA and WI, and operates under American Pacific Mortgage in NV. The Arrowood Team originates primarily in Tennessee and Southwest Virginia.
119 Boone Ridge Dr, Suite 203
Johnson City, TN 37615
(423) 406-1567
arrowoodteam@preferredrate.com
A fifteen-minute conversation will tell you what you can borrow, what it costs monthly, and whether conventional is actually your best option. No credit pull required to start.
NMLS CONSUMER ACCESS LINK: NMLS #1850
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© 2024 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.
Refinancing may result in finance charges that may be higher over the life of the loan. Consult with your loan advisor for details.
Not available in New York. Licensed as Preferred Rate in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in NV. AZ BK 1014819. CA #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 164. Licensed under the Oregon Consumer Finance Act. OK MLO13426.
Licensed by the Illinois Department of Financial & Professional Regulation, Residential Mortgage License # MB.6761304 | James R. Thompson Center | IDPR – 555 West Monroe Street, 5th Floor Chicago, IL 60661 | (888) 473-4858
Licensed by the Dept of Financial Protection and Innovation under the CRMLA.
The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.” (Source: P.A. 101-657, eff. 3-23-21.)
CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV
