Everything You Need to Know About Mortgages

It depends on your loan type! Conventional loans can go as low as 3% down for first-time buyers. FHA loans require just 3.5%. VA loans offer 0% down for eligible veterans and active military. USDA loans also offer 0% down in eligible rural areas. The traditional 20% down payment helps you avoid PMI and get better rates, but it's not required.

Minimum credit scores vary by loan type. FHA loans can work with scores as low as 580 (or 500 with 10% down). Conventional loans typically need 620+. VA loans are more flexible. For the best rates, aim for 740+. Even if your score is lower, we can help you explore options and work on improving your credit.

Get pre-approved! Pre-qualification is a quick estimate based on self-reported info. Pre-approval means we've verified your finances, pulled your credit, and you have a conditional commitment for a specific loan amount. In competitive markets, sellers often require pre-approval letters before accepting offers.

Typically 30-45 days from offer acceptance to closing. The process includes: offer acceptance, home inspection (7-10 days), appraisal (1-2 weeks), underwriting (1-2 weeks), and final closing (1 day). We can expedite to 21 days if needed. VA and FHA loans may take slightly longer due to additional requirements.

Be ready with: 2 years of W-2s and tax returns, recent pay stubs (last 30 days), 2 months of bank statements, photo ID, proof of any other income, and employment verification. Self-employed? You'll need business tax returns and possibly a P&L statement. We'll provide a complete checklist during pre-approval.

Closing costs typically run 2-5% of the loan amount and include: appraisal fee ($500-$800), title insurance, loan origination fees, escrow/attorney fees, prepaid taxes and insurance, and recording fees. On a $300K loan, expect $6,000-$15,000. You can negotiate seller credits or roll some costs into your loan in certain cases.

Your DTI is your total monthly debt payments divided by your gross monthly income. Most lenders want to see 43% or less (some loans allow up to 50%). This includes your future mortgage payment, car loans, student loans, credit cards, and other debts. Lower DTI = stronger application and better rates.

Absolutely! Student loans are factored into your debt-to-income ratio, but they don't disqualify you. We use either your actual payment or 0.5-1% of the loan balance as the monthly payment. Income-driven repayment plans can help. Many first-time buyers successfully purchase homes while carrying student debt.

Yes! Gift funds from family members are allowed on most loan types. You'll need a gift letter stating it's a gift (not a loan) and documentation of the transfer. FHA allows 100% of your down payment to be gifted. Conventional loans may require some of your own funds. The donor typically needs to be a relative.

Fixed-rate mortgages lock your rate for the entire loan term (15, 20, or 30 years). Adjustable-Rate Mortgages (ARMs) have a fixed rate for an initial period (5, 7, or 10 years), then adjust annually based on market rates. ARMs offer lower initial rates but carry rate-change risk. Best for those planning to sell or refinance before adjustment.

It depends on your goals! 30-year loans have lower monthly payments and more flexibility, making them popular for first-time buyers. 15-year loans have higher payments but significantly lower total interest (often saving $100K+) and faster equity building. Consider your budget, goals, and other financial priorities. You can always make extra payments on a 30-year loan.

Private Mortgage Insurance (PMI) protects the lender if you default. It's required on conventional loans with less than 20% down, typically costing 0.5-1% of the loan annually. Ways to avoid it: Put 20% down, use a piggyback loan (80-10-10), choose a VA loan (no PMI), or ask about lender-paid PMI options. PMI can be removed once you reach 20% equity.

Yes! Self-employed buyers qualify for the same loan programs. You'll need 2 years of tax returns (personal and business), year-to-date P&L, business license, and bank statements. Lenders average your income over 2 years. Business write-offs reduce qualifying income, so plan accordingly. We also offer bank statement loans for those with complex income documentation.

You can still qualify! FHA loans allow bankruptcy after 2 years and foreclosure after 3 years (with extenuating circumstances). Conventional loans require 4 years post-bankruptcy and 7 years post-foreclosure. VA loans are more flexible. You'll need to re-establish good credit and show financial stability. Many people successfully buy homes after financial hardship.