A mortgage is a type of loan you use to buy a home. Instead of paying the full price upfront, you borrow money from a lender and repay it over time with interest. Most mortgages are paid monthly and include your principal, interest, property taxes, and homeowners insurance.
How much house you can afford depends on your income, credit score, down payment, and monthly debts. A common rule of thumb is keeping your mortgage payment at or below 28% of your gross monthly income. A mortgage pre-approval gives you the most accurate number based on your personal finances.
Most lenders look for a credit score of at least 620 for conventional loans. FHA loans may allow scores as low as 580 with 3.5% down. The higher your credit score, the better your chances of qualifying for a lower interest rate.
You don’t always need 20% down. Many buyers qualify with:
- 3% down (conventional loans)
- 5% down (FHA loans)
- 0% down (VA and USDA loans)
A bigger down payment lowers your monthly payment and may help you avoid private mortgage insurance (PMI).
Private Mortgage Insurance (PMI) is an extra fee added to your mortgage if your down payment is less than 20%. PMI protects the lender, not you, in case of default. Once you build up 20% equity in your home, you can often remove PMI.
- Pre-qualification is an estimate based on self-reported information.
- Pre-approval is a lender-verified review of your finances, credit, and income.
Pre-approval carries more weight with sellers and shows you’re a serious buyer.
The main mortgage types are:
- Conventional loans (most common)
- FHA loans (government-backed, low down payment)
- VA loans (for veterans and active military, 0% down)
- USDA loans (for rural areas, 0% down)
- Jumbo loans (for high-priced homes)
On average, the mortgage process takes 30 to 45 days from application to closing. Timelines vary depending on the loan type, appraisal, and how quickly you provide required documents. With us our average time to close is under 20 days!
Closing costs are the fees you pay to finalize your mortgage. They typically range from 2% to 5% of the loan amount and cover expenses like appraisal, title insurance, and lender fees. Some costs may be negotiable or covered by the seller.
Yes. Refinancing replaces your current mortgage with a new one, often to lower your interest rate, reduce your monthly payment, or tap into home equity. Timing matters—refinancing can save you money when rates drop.
- Fixed-rate mortgage: Interest rate stays the same for the life of the loan.
- Adjustable-rate mortgage (ARM): Rate starts lower but can change after an initial fixed period.
Fixed rates offer stability, while ARMs may help you save upfront if you plan to move or refinance.
To get pre-approved, you’ll need to provide your lender with:
- Proof of income
- Proof of assets
- Authorization to get a Credit Report
Pre-approval shows sellers you’re financially ready to buy.
A monthly mortgage payment usually includes four parts: principal, interest, taxes, and insurance (PITI). If you put less than 20% down, you may also have private mortgage insurance (PMI).
- FHA loans: Low down payment (3.5%) and flexible credit requirements.
- VA loans: 0% down and no PMI for veterans and active-duty service members.
- USDA loans: 0% down for homes in eligible rural areas.
Yes! Many states and lenders offer first-time homebuyer programs, which may include:
- Down payment assistance
- Lower interest rates
- Closing cost help
- Tax credits
Your mortgage interest rate is the percentage you pay to borrow money from a lender. Rates are influenced by your credit score, loan type, loan term, and the overall economy. Even a small difference in rate can save you thousands over the life of the loan.
Home equity is the difference between your home’s value and what you owe on your mortgage. For example, if your home is worth $300,000 and your loan balance is $200,000, you have $100,000 in equity. Equity grows as you pay down your loan and as your home value increases.
Yes, with certain loan programs if you qualify:
- VA loans (for military borrowers)
- USDA loans (for rural areas)
Some lenders and state programs also offer down payment assistance for qualified buyers.
Typical documents include:
- Recent pay stubs
- W-2s or tax returns
- Bank statements
- Photo ID
- Proof of assets and debts
Having these ready speeds up your approval process.
Yes! Self-employed borrowers can qualify with two years of tax returns, profit and loss statements, and bank records. We offer bank statement loans and other programs specifically for business owners; if traditional documentation is difficult.
Missing a payment may result in late fees and credit score impact. If you fall behind, contact your lender right away — options like repayment plans, forbearance, or loan modifications may be available.
Most experts recommend living in your home for at least 6 months before refinancing or selling, to recover closing costs and build equity. However, the best timing depends on your personal goals and the housing market.
Yes, many lenders like ourselves allow you to make extra payments toward the principal or pay off your loan early. Always check if your loan has a prepayment penalty before making large payments.
An escrow account is a savings account managed by your lender to cover property taxes and homeowners insurance. A portion of your monthly mortgage payment is set aside in escrow so those bills are paid automatically.
- 15-year mortgage: Higher monthly payment, but lower interest rate and less paid over the life of the loan.
- 30-year mortgage: Lower monthly payment, but higher total interest costs.
Your choice depends on your budget and long-term financial goals.
