1. Why should I get preapproved for a mortgage?
Getting preapproved for a mortgage has a few key benefits. First, it helps you understand how much you can comfortably afford, making your home search more focused. Second, having a preapproval in hand can give you a competitive edge when making an offer. Ready to take the first step? Click here.
2. How much of a mortgage should I get?
When figuring out how much home you can afford, there are several important factors to consider. Start with your income, monthly expenses, savings, potential down payment, current interest rates, and home prices in your area.
It’s also crucial to think about what monthly payment feels comfortable for you. Be sure to account for all your other living expenses—like car payments, groceries, gas, dining out, and entertainment. Take the time to list everything and review your full budget to see what you’re spending versus what you’re earning. Our mortgage calculators can help give you a clearer picture of what you can realistically afford.
3. What are the current mortgage rates?
Mortgage interest rates fluctuate frequently, so it’s important to check the latest rates and find out what you qualify for before you start shopping for a home. Getting preapproved and locking in your rate can protect you from potential increases while you search. Keep in mind that most lenders charge a fee to lock in a rate, and the cost depends on how long you want to hold it—typically between 30 and 90 days.
4. What does debt-to-income ratio mean?
Your debt-to-income (DTI) ratio measures how much of your gross monthly income goes toward paying your monthly debts—like your estimated mortgage, credit cards, student loans, and car payments. To calculate it, divide your total monthly debt by your gross monthly income. The result is a percentage that helps lenders assess your ability to manage monthly payments.
Most lenders prefer a DTI below 43%, though some loan programs may allow for higher ratios. Your lender can help you calculate your DTI and explore which mortgage options you may qualify for based on your financial profile.
5. What credit score do I need to qualify for a mortgage?
Your credit score plays a key role in the mortgage process—it helps lenders determine your eligibility, the types of loans you may qualify for, and the interest rate you’ll receive. Generally, the higher your score, the better your loan terms. However, even if your credit isn’t perfect, you may still be able to get approved for a mortgage.
Before applying, review your credit report to ensure everything is accurate. If you spot any errors, address them as soon as possible, as correcting issues can take time. Reach out to the credit bureaus with any necessary documentation. Also, be sure to pay all of your bills on time, as consistent payment history is one of the best ways to boost your score.
6. What is Private Mortgage Insurance (PMI)?
Private Mortgage Insurance (PMI) is typically required on conventional loans when your down payment is less than 20%. It protects the lender if you stop making payments on your loan. PMI is included in your monthly mortgage payment. and once your loan balance drops to 80% of the home’s original value, you can request to have PMI removed.
7. What documents do I need when applying for a mortgage?
Lenders require several documents when applying for a mortgage.
- Last 2 years federal tax returns and W-2s/1099’s
- Last 2 years business tax returns(if applicable)
- 1 month pay stubs
- Copy of your driver’s license and SS card(if available)
- 2 month’s bank statements
- 2 months investment accounts, retirement or anywhere you have money(not necessary but helpful)
8. What is an FHA mortgage?
An FHA (Federal Housing Administration) loan is a government-backed mortgage that offers financing for up to 96.5% of a home’s purchase price and the down payment can come from gift funds. Unlike some other programs, FHA loans don’t require you to meet low-to-moderate income guidelines to qualify.
9. What Is a Conventional loan?
A conventional loan is a type of mortgage that isn’t backed by the government, unlike FHA or VA loans. These loans are typically offered by private lenders and often require a higher credit score and a larger down payment. Conventional loans can be either conforming (meeting Fannie Mae and Freddie Mac guidelines) or non-conforming, and they’re a popular choice for borrowers with strong credit and steady income.
9. What Is a VA loan?
If you’re a veteran, active-duty service member, or a member of the National Guard or Reserve, you may qualify for a VA loan. While you’ll still need to meet certain income and credit requirements, VA loans offer significant benefits—including low or no down payment options and no mortgage insurance—helping to keep your monthly payments more affordable than many other loan types.
10. How long does the mortgage process usually take?
The mortgage process usually takes between 30 and 60 days, though it can sometimes take longer. Being organized—by having all your documents ready—and staying in close contact with your lender can help speed things up and keep the process on track.
11. Are there tax benefits of a mortgage?
Owning a home can come with valuable tax benefits, including potential deductions for mortgage interest, property taxes, and mortgage points. Some low-to-moderate income homeowners may also qualify for tax credits. To understand which benefits apply to you, it’s best to consult a tax advisor.
Getting a mortgage doesn’t have to be overwhelming. With the right information and a knowledgeable lender by your side, you’ll be well on your way to owning your new home.