Here are some of the most questions that I have been ask during my career. I hope this sheds light for anyone who may have the same questions. I’m just a call away if you need further help!
The FAQ’s
Q: How much house can I afford?
A: Determining how much house you can afford depends on your income, debt-to-income ratio (DTI), and down payment size. Most lenders follow the 28/36 rule: your mortgage payment shouldn’t exceed 28% of your gross monthly income, and your total debt payments shouldn’t exceed 36%. Use our mortgage affordability calculator to get a precise estimate based on today’s current mortgage rates.
Q: What is the difference between pre-qualification and pre-approval?
A: A mortgage pre-qualification is a rough estimate of what you might borrow based on self-reported info. A mortgage pre-approval is a verified statement from a lender stating exactly how much they are willing to lend you. In a competitive market, having a pre-approval letter is essential to show sellers you are a serious buyer.
Q: What are current mortgage rates right now?
A: Current mortgage rates fluctuate daily based on the bond market and central bank policies. While national averages give you a baseline, your specific rate will depend on your credit score, loan type, and down payment. Contact us today for a personalized rate quote to see exactly what you qualify for.
Q: How does my credit score affect my mortgage rate?
A: Your credit score is one of the biggest factors in determining your interest rate. Generally, a score of 740 or higher secures the lowest mortgage rates. Lower scores may result in slightly higher rates or the need for a larger down payment. We can help you understand your credit profile and how to improve it before applying.
First-Time Home Buyer Questions:
Q: How much down payment do I need for a house?
A: You do not always need 20% down! Many first-time home buyer programs allow for down payments as low as 3% or 3.5% (like FHA loans). Some VA loans and USDA loans even offer 0% down payment options for qualified buyers. We can help you compare low down payment mortgage options to find the best fit for your budget.
Q: What are closing costs and how much are they?
A: Closing costs are fees paid at the end of a real estate transaction. They typically range from 2% to 5% of the loan amount. These include appraisal fees, title insurance, and origination fees. When budgeting for a home, it is crucial to save for both your down payment and your estimated closing costs.
Q: Should I choose a fixed-rate or adjustable-rate mortgage (ARM)?
A: A 30-year fixed-rate mortgage offers stability because your principal and interest payments never change. An adjustable-rate mortgage (ARM) often starts with a lower rate for 5–7 years but can increase later. If you plan to stay in your “forever home,” a fixed rate is usually safer. If you plan to move or refinance in a few years, an ARM might save you money.
Refinancing & Renewal Questions
Q: When is the best time to refinance my mortgage?
A: The best time to refinance your mortgage is typically when interest rates drop at least 0.75% to 1% below your current rate, or if you need to shorten your loan term. Many homeowners also use a cash-out refinance to pay off high-interest debt or fund home renovations.
Q: How do I lock in a mortgage rate?
A: A mortgage rate lock guarantees your interest rate for a set period (usually 30 to 60 days) while your loan is processed. This protects you if rates rise before you close. We monitor the market closely and will advise you on the best time to lock in your rate to ensure you get the best mortgage deal.
Do you have any questions or need some clarification? Feel free to contact me!
