Frequently Asked Questions
Table of Contents
Q: What will my rate be?
A: This varies please speak with your Licensed Mortgage Consultant.
Q: How much will I pay in closing costs?
A: This typically includes origination fees and third-party fees for title searches, processing documents,
appraisal fees, prorated and prepaid taxes/insurance and other administrative costs. The amount can
vary depending on your loan amount and your area. Please review your Loan Estimate and speak with
your Licensed Mortgage Consultant for further details of your closing cost.
Q: How much can I borrow to buy a home?
A: When determining the amount you can borrow, lenders consider your income level compared with
your debt, evidence of sufficient employment status and your credit history. Please speak with your
Licensed Mortgage Consultant to get prequalified for a mortgage before you plan to shop for a home.
Q: How much money do I need for down payment?
A: If you put down 20% of the purchase price, this could eliminate Mortgage Insurance (MI) which is a
additional fee that will be included in your monthly mortgage payment. Although you are not required
to put down 20%, putting down less than 20% not only initiates MI but it can also affect other variables
as well, such as your interest rate, terms, and monthly payments. Please speak with your License
Mortgage Consultant to determine what is best for you.
Q: Is the down payment the same as the closing costs?
A: No! Down payment is separate from closing costs. Down payment is applied to the sales price and
closing costs are applied to the cost of the loan and other administrative fees.
Q: What is Earnest Money Deposit (EMD) and how does it apply to my home purchase?
A: Earnest money deposit (EMD) is the amount paid upfront that a buyer puts down at the time of
signing a binding real estate contract. EMD shows the seller that the buyer is offering good faith to
purchase the property. EMD is applied towards the purchase price for the buyer at the time of closing.
Q: Are there any down payment assistance (DPA) programs available?
A: First-time homebuyers and Military Veterans may be eligible or special government-sponsored
mortgage loan programs. Veterans and active service members, if eligible may apply for a VA loan,
which generally has a lower interest rate and does not require a down payment. A Federal Housing
Administration (FHA) loan is also an option for consumers. Please speak with your Licensed Mortgage
Consultant to see if DPA program is available to fit your needs.
Q: What is the difference between a Fixed-Rate mortgage and an Adjustable-Rate Mortgage (ARM)?
A: Fixed-Rate Mortgage sets the interest rate for the life of the loan, monthly payments of the principal
and interest remain the same for the life of the loan.
A: Adjustable-Rate Mortgage (ARM) the interest rate may change periodically during the term of the
loan, therefore your monthly payment may increase or decrease based on the interest rate changes.
Q: What type of mortgage do you recommend for me?
A: There are several types of mortgages that currently exist. You may choose from Conventional,
Government-backed FHA, USDA, VA, Reverse Mortgage, etc. Please speak with your Licensed Mortgage
Consultant to discuss the type of mortgage they recommend based on your situation.
Q: What will my monthly payments be?
A: Your monthly payment will include principal, interest, taxes and insurance (PITI). It may also include
Private Mortgage Insurance (PMI) or Mortgage Insurance (MI) depending on the type of loan you have.
Your initial Loan Estimate will provide you and estimation of your PITI however, you should speak with
your Licensed Mortgage Consultant in detail to know your expected monthly payment amount.
Q: Is Mortgage Insurance required?
A: Mortgage Insurance is often required if your down payment is less than 20 percent.
Q: Will my Credit Report be pulled, and will it show on my credit report?
A: Yes! It is necessary to pull your credit report prior to determining or prequalifying for a mortgage
loan. This credit inquiry is considered to be a “Hard Inquiry” and will appear on your credit report.
However, hard inquiries are removed automatically from the credit report after 2 years of the date
pulled.
Q: Can I get a mortgage without a credit score?
A: Yes! In some cases you may be allowed to show “Alternative Credit” equal to 12-24 months of
positive payment history for Rent, Utility, home phone, cell phone or cable bills, insurance premium
payment etc. The more evidence you can provide of your on-time payment history, the higher your
chances of qualifying.
Q: What’s the difference between No Credit and Low Credit?
A: No Credit Score: means you’ve avoided creating credit debt and there is no history reporting on
your credit report to evidence any debt obtained. You may still be able to purchase a home with no
credit score if you work with a lender who does manual underwriting.
A: Low Credit (bad credit): means you’ve probably made big money mistakes in the past, you may have
filed bankruptcy, defaulted on debt or a house previously owned, or racked up a ton of credit card debt
that you haven’t been able to repay. A low credit score will make it harder for you to find a lender
willing to give you a mortgage.
Q: Is there a fee charged for utilizing a Licensed Mortgage Consultant?
A: Yes! This fee is called a Broker Origination fee. This fee is part of or included in your closing cost fees
and not a separate fee to be paid. Such as a Licensed Real Estate Agent is paid a fee from the Seller for
selling their home, a Licensed Mortgage Consultant is compensated for successfully getting a borrower to the closing table. The typical Broker Origination fee is equal to or less than 2.75% of the loan amount. This fee is ONLY collected at closing on a mortgage loan transaction.
Q: What is the difference between being prequalified and preapproved?
A: Prequalified: Is a conversation between you and your Licensed Mortgage Consultant about your income, assets, credit, and down payment.
A: Preapproved: Is allowing the licensed Mortgage Consultant to access your credit file by pulling a credit report along with providing your income and asset documentation for review to determine how much you can afford to purchase.