Frequently asked questions!
This is a list of our frequently asked questions :)
What is a mortgage, and how does it work?
A mortgage is a loan used to purchase a home or other real estate property. The borrower agrees to repay the loan over a set period of time, typically 10 to 30 years, with interest. The lender holds a lien on the property until the loan is fully repaid.
How much of a down payment do I need to make for a mortgage?
Many people wonder how much money they need to save up for a down payment on a mortgage. The amount can vary depending on factors such as the type of mortgage and the lender, but typically a down payment of 3-20% of the home's purchase price is required.
What is the difference between a fixed-rate and an adjustable-rate mortgage?
Many people are confused about the differences between these two types of mortgages. A fixed-rate mortgage has a set interest rate that does not change throughout the life of the loan, while an adjustable-rate mortgage has an interest rate that can fluctuate based on market conditions.
What credit score do I need to qualify for a mortgage?
This is a common question for people who are considering applying for a mortgage. While credit score requirements can vary depending on the lender and the type of mortgage, typically a credit score of 620 or higher is needed to qualify for a mortgage. However, some lenders may require a higher credit score for certain types of loans or to qualify for better interest rates.
How is my mortgage interest rate determined?
Mortgage interest rates are determined by a variety of factors, including the borrower's credit score, loan type, loan amount, loan term, and current market conditions.
What is private mortgage insurance (PMI), and when is it required?
PMI is insurance that protects the lender in the event the borrower defaults on the loan. It is typically required when the borrower puts down less than 20% of the purchase price as a down payment.
How long does it take to get approved for a mortgage?
The timeline for mortgage approval can vary depending on the lender, loan type, and borrower's financial situation, but typically takes anywhere from several days to a few weeks.
What is the difference between pre-qualification and pre-approval?
Pre-qualification is an estimate of how much a borrower may be able to borrow based on their income, assets, and debts, while pre-approval is a more detailed process that involves a lender verifying the borrower's financial information and credit history.
What is the difference between the loan term and amortization period?
The loan term is the length of time a borrower has to repay the loan, while the amortization period is the length of time it takes to fully pay off the loan based on the monthly payment amount.
What is the closing process, and how long does it take?
The closing process is the final step in the home-buying process, where the buyer and seller sign the necessary documents and funds are exchanged. The timeline for closing can vary but typically takes several hours to a few days.
Can I refinance my mortgage, and when is it a good idea to do so?
Yes, a borrower can refinance their mortgage to potentially lower their interest rate, monthly payment, or shorten the loan term. It may be a good idea to refinance if interest rates have decreased or the borrower's financial situation has improved.
What is a foreclosure, and what happens if I can't make my mortgage payments?
Foreclosure is the legal process through which a lender takes possession of a property from a borrower who has failed to make mortgage payments. If a borrower can't make their mortgage payments, they may face foreclosure, which can result in the loss of their home and damage to their credit score. It's important for borrowers to communicate with their lender and explore options to avoid foreclosure, such as loan modification or short sale.