Frequently Asked Questions

A mortgage is a loan used to purchase a home, where the property serves as collateral. You borrow funds from a lender and agree to repay it over a fixed period with interest. If payments aren’t made, the lender can foreclose on the property.

There are various mortgage types, including fixed-rate, adjustable-rate (ARM), FHA, VA, and USDA loans. Each has unique features suited to different financial situations and needs.

The loan amount depends on several factors: your income, credit score, debt-to-income (DTI) ratio, and the property value. Lenders evaluate these to determine the loan amount and terms.

Pre-qualification gives an estimate of how much you may borrow, while pre-approval is a more formal process involving a credit check and financial documentation, giving you a conditional commitment for a loan.

Your rate depends on factors like your credit score, loan type, loan term, and market rates. Lenders use these to assess the risk and set an interest rate accordingly.

Yes, but check if your loan has a prepayment penalty. Some mortgages allow early payments or additional principal payments without penalties, which can reduce your total interest.

An escrow account holds funds for property taxes and insurance, paid by your lender. It’s often required by lenders, ensuring these expenses are covered, and protecting the property value.

PMI protects lenders if borrowers default and is usually required if your down payment is less than 20%. PMI can often be canceled once you reach 20% equity in your home.

Typically, the process takes 30 to 45 days but can vary. Factors like the loan type, documentation, and underwriting requirements impact timing.

Common documents include proof of income, tax returns, bank statements, and identification. Specific requirements vary based on the loan type and lender.

Look at interest rates, fees, loan options, customer service, and reputation. Comparing lenders can help you find the best terms for your situation.

If you miss a payment, contact your lender immediately. Some offer grace periods, but continued missed payments can lead to late fees and potentially foreclosure.

The down payment depends on the loan type. Conventional loans usually require 3-20%, while FHA loans may allow as little as 3.5%. Some VA and USDA loans offer 0% down payment options.

A higher credit score often qualifies you for better interest rates, saving you money over the loan’s life. Lenders typically prefer scores above 620 for most mortgage types.

Yes, you can refinance to lower your interest rate, shorten your loan term, or change loan types. Refinancing can save you money if market rates are lower or your credit has improved.