Frequently Asked Questions and In-Depth Answers

A mortgage is a loan that helps you buy a home. It’s actually a contract between you (the borrower) and a lender (like a bank, mortgage company, or credit union) to lend you money to buy a home. You repay the money based on the agreement you sign. But if you default (that is, if you don’t pay off the loan or, in some situations, if you don’t make your payments on time), the lender may have the right to take the property. 

You'll need to take several things into account when determining how much you can comfortably afford. Consider how much you make, your monthly expenses, how much money you have saved, how much you can put towards a down payment, current interest rates and current home values.  You can start by using an online mortgage calculator, which estimates your monthly payments based on the home price, down payment, loan term, and interest rate.

Additionally, speaking to our mortgage advisors can give you a more tailored assessment based on your income, debts, and credit score.

Your credit score plays an important role in determining whether or not you qualify for a loan, as well as the type of loan you may qualify for and the interest rate. Lenders use your credit score to determine risk. While higher credit scores usually mean better rates, you may still qualify for a mortgage loan even if your score is less than perfect.

Additionally, you can go to AnnualCreditReport.com to review your reports, and fix any errors on them.

A low credit score can limit your mortgage options, but there are steps you can take to improve it:

- Check your credit report for errors and dispute any inaccuracies.

- Pay your bills on time.

- Reduce your credit card balances.

- Avoid opening new credit accounts before applying for a mortgage.

There are several types of mortgages, including:

Fixed-Rate Mortgages: The interest rate remains the same for the entire term of the loan.

Adjustable-Rate Mortgages (ARMs): The interest rate changes periodically, typically in relation to an index, and payments may go up or down accordingly.

FHA Loans: Insured by the Federal Housing Administration, these loans allow lower credit scores and smaller down payments.

VA Loans: Guaranteed by the Department of Veterans Affairs, for eligible veterans and service members, often requiring no down payment.

Missing a mortgage payment can negatively affect your credit score and potentially lead to foreclosure.

It typically takes 30 to 60 days to get a mortgage, though it can take longer. Having all your documents and information ready and working closely with a mortgage lender will help move things along more quickly. It can vary widely based on the complexity of your financial situation, the type of loan, and underwriting factors.

An escrow account is set up by the mortgage lender to pay certain ongoing expenses related to your home, such as property taxes and homeowners insurance. A portion of your monthly mortgage payment is deposited into this account to cover these costs.

Closing costs are fees associated with finalizing a mortgage. They can include appraisal fees, title insurance, origination fees, and more. Once you sign, you get the mortgage loan proceeds — and you’re now legally responsible to pay back the loan.