Mortgage FAQ

A typical down payment ranges from 3% to 20% of the home's price. If you qualify, there may be programs available to first-time homebuyers or homebuyers in the low-to-moderate income bracket that may be available for down payment assistance. Consult your mortgage professional to see if you are eligible.

Many lenders look for a credit score of 620 or higher, but better rates are usually available to those with scores above 740.

Closing costs include lender fees (such as origination and appraisal), title-related fees (such as title insurance and survey), and prepaid items (such as property taxes and homeowners insurance). They typically range from 2% to 5% of the purchase price. When you apply for a mortgage, you'll receive a detailed estimate of your total costs.

Yes — and ideally before you start looking at homes. Pre-approval is different from pre-qualification: pre-qualification is a quick estimate based on self-reported information, while pre-approval involves a full credit pull, income verification, and asset documentation. In a competitive market, sellers often won't consider an offer without a pre-approval letter. Many lenders now offer digital pre-approval within 24 to 48 hours. Shop at least two or three lenders so you can compare rates and fees before committing.

After you apply, the lender prepares your file and submits it to an underwriter for review. Underwriting typically takes 3 to 7 business days once your complete package is submitted — though it can take longer during busy periods or if additional documentation is requested. Once approved, your loan processor will contact you to confirm approval and coordinate the remaining steps: appraisal, flood certification, title commitment, and final closing preparation. The full process from application to closing typically runs 30 to 45 days.

Lenders or Banks do not require home inspections. However, most contracts require a home inspection during the option period. This inspection is a detailed examination of the home you're about to purchase. The inspector will test appliances and plumbing, check for termites, examine the foundation, and more. While not required, it's highly recommended. Your real estate agent should assist you with this.

The APR is disclosed on the Truth in Lending Statement and is a complex calculation of interest and other costs. Simply put, the APR is not your interest rate, and your payment is not calculated by the APR. Instead, the APR includes the interest rate, closing costs, and some other fees — all calculated into a single number. It's a measure of your total cost. Your payment and actual interest are based on your interest rate.

The lender or bank is responsible for ordering the appraisal. Lenders typically do not accept appraisals ordered by other parties. The appraiser will inspect the property and produce a comprehensive valuation report. This process usually takes 7 to 10 days.

The loan processor is assigned once your loan is approved. They help collect any remaining documents needed before closing and follow up on the appraisal and title commitment. If they call you, it's usually to introduce themselves or request documentation.

Delays often stem from homeowners insurance. Many customers wait too long to secure it. Lender or Bank won't send closing documents until they have an insurance binder. Please begin this process early. Also, provide any requested documents quickly. Underwriters may need items not collected at application. Even though closing typically takes about 30 days, the Lender will need everything required including proof of insurance 7 days in advance of the closing date.

Final figures come from the title company in a document called the Closing Disclosure (CD), which must be provided to you at least three business days before closing. Your lender will give you a preliminary estimate beforehand covering closing costs, taxes, insurance, and your down payment — useful if you need to liquidate assets or transfer funds. Title companies require certified funds via cashier's check or wire transfer; contact your title company early to confirm their preference and wiring instructions.

Timing mortgage rates is like timing the stock market — very difficult to get right, and waiting can cost you in other ways. If rates fall after you buy, you can refinance. If home prices rise while you wait, you may pay more even at a lower rate. The better question is: do you have stable income, enough saved for a down payment and closing costs, and do you plan to stay in the home at least 3 to 5 years? If yes, the math usually favors buying. Use a mortgage calculator to see what the monthly payment looks like at today's rate — that number matters more than the rate itself.

PMI is insurance that protects the lender — not you — if you default on the loan. It's typically required when your down payment is less than 20% of the purchase price. PMI costs roughly 0.5% to 1.5% of the loan amount per year, added to your monthly payment. You can avoid it by putting 20% or more down, or by using a piggyback loan structure (commonly 80/10/10, where a second loan covers part of the down payment). If you already pay PMI, you can request cancellation once your loan balance reaches 80% of the home's original value — and it must automatically terminate at 78% under the Homeowners Protection Act.

A rate lock guarantees your interest rate for a set period — typically 30 to 60 days — while your loan is processed. This protects you from rate increases between application and closing. Most lenders offer free locks for 30 to 45 days; longer locks may carry a fee or a slightly higher rate. Lock your rate once you are under contract and have selected a lender. If rates drop after you lock, ask your lender about a float-down option, which lets you capture a portion of the decrease — not all lenders offer this, so ask upfront.

You may not make your first payment for 30 to 60 days after closing. Mortgage interest is paid in arrears, meaning you pay for the prior month. For example, if you close on May 15, you'll pay interest from May 15 to May 31 at closing. Your first payment would be due July 1, covering June's interest. You'll receive monthly statements or coupons which will direct you where to make your payments. The first payment details will be in your closing package.