Getting a mortgage can bring up a lot of questions. While every borrower and transaction is different, these answers can help you understand what to expect when purchasing, refinancing, or exploring your financing options.

Getting Started

How do I know how much home I can afford?

Your purchasing power depends on several factors, including your income, monthly debts, credit profile, available funds, estimated property taxes and insurance, HOA fees when applicable, and the loan program. A prequalification can help establish a realistic price range before you begin shopping.

Should I get prequalified before looking for a home?

Yes. Getting prequalified early can help you understand your estimated purchasing power, compare potential loan programs, and identify issues that may need attention before you make an offer.

Does getting prequalified guarantee that my loan will be approved?

No. Prequalification is a preliminary evaluation and is not a commitment to lend. Final approval depends on verification of your information, underwriting, the property, and applicable loan requirements.

How much money do I need for a down payment?

It depends on the loan program. Some programs offer low down-payment options, and qualified VA and USDA borrowers may be eligible for financing without a down payment. Conventional, FHA, jumbo, investment, and specialty programs have different requirements.

Do I need perfect credit to get a mortgage?

No. Credit requirements vary considerably by loan program. Your credit score is only one part of the qualification process.

Can I qualify if I'm self-employed?

Possibly. Self-employed borrowers may qualify using traditional income documentation or, depending on the situation and available programs, alternative documentation such as bank statements, 1099 income, profit-and-loss statements, or other qualifying methods.

Can I buy a home if I already own another property?

Yes, depending on your qualifications and the intended occupancy. Financing may be available for another primary residence, a second home, or an investment property, but the requirements can differ.

Credit, Income & Down Payment

What credit score do I need to qualify for a mortgage?

There isn't one minimum credit score that applies to every mortgage. Requirements vary by loan program, lender guidelines, property type, and the borrower's overall financial profile. Even if your credit isn't perfect, it's worth reviewing your options before assuming you won't qualify.

Will checking my credit hurt my credit score?

A mortgage credit inquiry may affect your credit score, but the impact is generally only one factor in your overall credit profile. If you're concerned about your credit, we can discuss the mortgage process before moving forward with a full application.

Should I pay off credit cards before applying for a mortgage?

Not necessarily. Paying down debt can sometimes help qualification, but using cash to pay off accounts could reduce funds needed for your down payment, closing costs, or reserves. It's best to review your situation before making major financial changes.

Can I use gift money for my down payment?

Many mortgage programs allow eligible gift funds for some or all of the down payment or closing costs. Who may provide the gift and how it must be documented depends on the loan program.

What income can be used to qualify for a mortgage?

Depending on the program and documentation requirements, qualifying income may include salary, hourly wages, overtime, bonuses, commissions, self-employment income, retirement or pension income, Social Security, rental income, and other eligible sources.

What if my income varies from month to month?

Variable income doesn't automatically prevent you from qualifying. The lender may review your income history and calculate qualifying income according to the applicable loan guidelines.

Can retirement or Social Security income be used to qualify?

Yes, eligible retirement, pension, and Social Security income may be used when it meets the applicable documentation and continuance requirements.

Can I qualify with a new job?

Possibly. A recent job change doesn't automatically prevent mortgage approval. The type of employment, compensation, employment history, and loan program can all affect how the income is evaluated.

Do I need money left over after closing?

Some loan programs or borrower situations require financial reserves after closing. Even when reserves aren't required, maintaining savings after purchasing a home can be helpful.

Appraisal, Underwriting & Closing

Why does the lender need an appraisal?

An appraisal provides an independent opinion of the property's value and helps the lender determine whether the property provides adequate security for the mortgage. Depending on the loan program, the appraisal may also address certain property requirements.

What happens if the appraisal comes in lower than the purchase price?

A low appraisal doesn't necessarily mean the transaction is over. Depending on the circumstances, the buyer and seller may renegotiate, the buyer may contribute additional funds, the appraisal may be reviewed or reconsidered when appropriate, or the financing may need to be restructured.

What does an underwriter do?

The underwriter reviews the loan to determine whether the borrower, property, and transaction meet the requirements of the mortgage program. This can include reviewing credit, income, employment, assets, debts, appraisal, title information, and other documentation.

What are underwriting conditions?

Conditions are additional items or explanations the underwriter needs before the loan can receive final approval. A condition doesn't necessarily mean there is a problem—it is a normal part of many mortgage transactions.

Why is the lender asking me for documents I've already provided?

Sometimes updated documents are required because an earlier document has become outdated, additional information needs to be verified, or the underwriter needs clarification. Providing requested documents promptly can help keep the loan moving.

Can I open a new credit card or buy a car before closing?

It's generally best to avoid taking on new debt or making significant credit purchases while your mortgage is being processed. New debt or credit inquiries could affect your qualification.

Can I change jobs before closing?

A change in employment can affect mortgage approval. Speak with your loan professional before making an employment change whenever possible.

What is final approval or “clear to close”?

Final approval generally means the lender has determined that the remaining underwriting requirements have been satisfied and the loan can move toward closing, subject to any final closing requirements.

What is the Closing Disclosure?

The Closing Disclosure (CD) provides the final details of your mortgage, including the loan terms, projected payments, closing costs, and estimated cash to close. For most covered mortgage transactions, federal rules require the borrower to receive the initial Closing Disclosure at least three business days before consummation.

What should I avoid doing before closing?

Until your mortgage closes, it's generally wise to avoid major financial changes without first discussing them with your loan professional. That includes opening new credit accounts, financing large purchases, moving substantial amounts of money without documentation, or changing employment.

Refinancing, Specialty Loans & Reverse Mortgages

When does it make sense to refinance?

Refinancing may be worth considering if you want to reduce your interest rate or payment, change the loan term, move from one type of mortgage to another, remove or change mortgage insurance when eligible, or access available home equity. The costs of refinancing should be weighed against the potential benefits.

Can I take cash out when I refinance?

Possibly. A cash-out refinance allows eligible homeowners to replace their existing mortgage with a larger loan and receive a portion of the available equity in cash. The amount available depends on property value, existing liens, credit, occupancy, and loan-program requirements.

What if I don't qualify for a traditional mortgage?

Traditional financing isn't the only option. Depending on your situation, alternative or specialty programs may be available for self-employed borrowers, investors, borrowers with complex income, or properties that don't fit conventional guidelines.

What is a bank statement loan?

A bank statement loan is an alternative-documentation mortgage that may allow eligible self-employed borrowers to qualify using deposits or cash flow documented through bank statements rather than traditional tax-return income calculations.

What is a DSCR loan?

A Debt Service Coverage Ratio (DSCR) loan is generally designed for investment properties. Qualification focuses primarily on the property's rental income compared with its housing expense rather than relying primarily on the borrower's personal employment income.

Can I finance a manufactured or mobile home?

Yes, financing may be available for eligible manufactured homes. The options depend on factors such as the home, land ownership, property classification, foundation, age and condition, occupancy, and loan program. Chattel financing may also be available in certain situations when the home is not financed as real property.

What is a reverse mortgage?

A reverse mortgage allows eligible homeowners to access a portion of their home equity without a required monthly principal-and-interest mortgage payment while the loan remains in good standing. The borrower continues to own the home and remains responsible for property taxes, homeowners insurance, applicable property charges, maintenance, and occupancy requirements.

Do I have to own my home free and clear to get a reverse mortgage?

No. An existing mortgage or other required lien can generally be paid off with reverse mortgage proceeds at closing, provided sufficient proceeds are available.

Can a reverse mortgage be used to purchase a home?

Yes. A Reverse for Purchase can allow an eligible borrower to combine personal funds with reverse mortgage proceeds to purchase a new primary residence.

What is the difference between a HECM and a proprietary reverse mortgage?

A HECM (Home Equity Conversion Mortgage) is an FHA-insured reverse mortgage for eligible homeowners age 62 and older. Proprietary reverse mortgages are offered by private lenders and may have different age, property, loan amount, and program requirements.

Still Have Questions?

Every mortgage situation is different. If you don't see your question here, I'm happy to help you understand your options.

Whether you're buying, refinancing, investing, or exploring a reverse mortgage, we can review your goals and determine the next step.

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