Frequently Asked Questions FAQs
General Mortgage Questions
What is a mortgage?
A mortgage is a loan used to purchase a home or refinance an existing home loan. The borrower agrees to repay the loan over time, typically with interest, in monthly installments.
What are the main types of mortgages available?
Common mortgage types include conventional, FHA, VA, USDA, jumbo, and adjustable-rate mortgages.
What is the difference between a fixed-rate and an adjustable-rate mortgage (ARM)?
A fixed-rate mortgage has a consistent interest rate for the life of the loan, while an ARM starts with a lower fixed rate and then adjusts periodically based on market conditions.
Loan Qualification & Requirements
What credit score do I need to qualify for a mortgage?
Most lenders require a credit score of at least 620 for conventional loans. FHA loans may allow scores as low as 580.
How much do I need for a down payment?
Down payments vary: Conventional (3%-20%), FHA (3.5%), VA & USDA (0% for eligible borrowers).
What documents do I need to apply for a mortgage?
Common documents include proof of income, tax returns, bank statements, and ID.
Mortgage Process
What is the difference between pre-qualification and pre-approval?
Pre-qualification is an estimate based on self-reported details, while pre-approval requires submitting documentation and a credit check.
How long does it take to get a mortgage?
The mortgage process typically takes 30-45 days.
Costs & Fees
What are closing costs, and how much should I expect to pay?
Closing costs typically range from 2%-5% of the home’s purchase price and include lender fees, appraisal, title insurance, and taxes.
What is private mortgage insurance (PMI), and do I need it?
PMI is required for conventional loans with a down payment of less than 20%.
After Getting a Mortgage
Can I pay off my mortgage early?
Yes, most loans do not have prepayment penalties. Paying extra can reduce interest costs.
What happens if I miss a mortgage payment?
If you miss a payment, you may incur late fees, and after 30 days, it could impact your credit score.
Can I refinance my mortgage to get a lower rate?
Yes! Refinancing can lower your interest rate, reduce payments, or allow access to home equity.