Frequently Asked Questions

A mortgage is a loan you use to purchase a home. It’s a legal agreement in which a mortgage lender pays for your house in full with the expectation that you will repay them back (with interest) over a set period of time. Mortgages allow homebuyers to purchase homes even if they don’t have all the money immediately available to purchase them upfront. 

Mortgage loan officers generate the paperwork needed to apply for a loan, and guide clients through the process. They also collect and review financial documents to issue pre-approval letters, so you can buy your home.

There are three main factors that come into play when being approved for a mortgage:

• A Qualifying Credit Score: Each loan program has a minimum credit score requirement in order to qualify. Higher credit scores can allow you to qualify for lower interest rates.

• Debt-To-Income ratio (DTI): Your debts should only make up a certain percentage of your income, because you’re about to incur a large and important debt by purchasing a home. Each loan program also have a maximum DTI percentage requirement that needs to be met in order to qualify for that type of mortgage.

• Down Payment: Some loan programs require you to make a minimum down payment. There are certain factors that can influence on what the minimum will be according to the loan program.

Basic Information:

• Valid ID, Driver's License, or State Issue ID card

• Social Security Card

• Address History for the past 2 years

• Employment History for the past 2 years - Including dates employed, company name, address, phone number, Employer Contact - Name and Number of supervisor or HR rep who will verbally confirm employment.

Proof of Income & Assets:

• Paystubs - If you get paid weekly, I need your 4 most recent paystubs, if you get paid every two weeks, I need your most recent 2 paystubs. 

• W2 forms for all employers for the most recent past 2 years (2022 & 2023)

• Tax Returns - Federal Tax Returns for the most recent two years (2022 & 2023) with all schedules included.

• Letter explaining any gaps in employment in the past 2 years.

• Work Visa or green card (copy front & back)

• Bank Statements - Copy of all Checking & Savings accounts statements for the most recent 2 months, all pages (even if one or more of the pages is blank)

Self-Employed:

• P&L Statement - Current year-to-date with Balance Sheet, please Sign & Date

• Tax Returns of 2022 & 2023 Federal Business Tax Returns and all Schedules (including K-1s), for each business.

If Applicable:

• 1099 for the past 2 years (2022 & 2023)

• Social Security Award Letter - All pages of most recent letter.

• Pension or Annuity income - All pages of most recent letter.

• Retirement Account Statements (401k's, IRAs, CDs, etc.) for the most recent 2 months statements - All pages (even if one or more of the pages is blank)

If you DO NOT Currently own a home:

• Landlord Contact - Name and phone number for each landlord during the past 2 years

If you Currently OWN a home or homes:

• Mortgage Statements - All pages of most recent statement for each property

• Homeowner's Insurance - All pages of Homeowner's insurance policy for each property

• Tax Bill - Copy of most recent tax bill, city/county, for each property

• HOA Fee - Copy of most recent HOA dues letter for each property. If no HOA, provide a signed and dated letter stating so.

Once under contract:

• Purchase Contract - All pages of sale contract, all riders and addendums, signed by all parties

• Realtor - Name and Contact information of your realtor

• If Condo - Condo Association, Name of Association and Contact information

• If For Sale by Owner - Name and contact information of the seller(s).

• Earnest Money - Copy of check, money order, or wire for initial deposit on contract.

Source of Funds & Down Payment:

• Savings, checking or money market funds - provide copies of bank statements of the last 2 months

• Stocks & Bonds -  provide copies of your statement from your broker or copies of certificates

• Gifts - If part of your cash to close, please provide a Gift Affidavit and proof of receipt of funds

• Proceedings of a sale of a home - provide a copy of the signed sales contract on your current residence and statement or listing agreement if unsold (at closing, you must also provide a settlement/Closing statement)

• A pre-qualification: is just your mortgage advisor’s estimate on your ability to buy a home. It’s based on your credit score and some other self-reported details. A pre-qual may give you a good idea on which loan program fits you best, and maybe even how much you’ll qualify for.

• A pre-approval: officially confirms how much you’re able to borrow. Your income and asset documents go through a more formal review. After getting pre-approved, you’re able to take a more serious look at buying a house. If you’re not able to get pre-approved, your advisor will be able to offer some helpful tips on raising your credit score, lowering your debt, or working through any other financial obstacles preventing you from buying a home.

An interest rate is the amount of money that you will pay the lender in order for them to lend you the money. This interest rate is expressed in a percentage-form (%) and it can be a fixed-rate or an adjustable rate.

Fixed-Rate - means that the rate given is never going to change. It will stay the same through out the term of the loan.

Adjustable Rate Mortgage (ARM) - means that the rate will change after certain amount of time through out the term of the loan. With an ARM, the interest rate and monthly payment may start out low. However, both the rate and the payment can increase very quickly.

Mortgage rates can change from the day you apply for a loan to the day you close the transaction. If interest rates rise sharply during the application process it can increase the borrower’s mortgage payment unexpectedly. Therefore, a lender can allow the borrower to “lock-in” the loan’s interest rate guaranteeing that rate for a specified time period, often 30-60 days, sometimes for a fee.

30-Year Fixed-Rate Loans

• The traditional 30-year fixed-rate mortgage has a constant interest rate and monthly payments that never change. A 30-year fixed-rate loan may be a good option if you plan on staying in your home for years to come.

About 15-Year Fixed-Rate Loans

• This loan is fully amortized over a 15-year period and features constant monthly payments. It offers all the advantages of the 30-year loan, plus a lower interest rate and you’ll own your home twice as fast. The disadvantage is that, with a 15-year loan, you commit to a higher monthly payment. Many borrowers opt for a 30-year fixed-rate loan and voluntarily make larger payments that will pay off their loan in 15 years.

We’ll help you clearly see differences between loan programs, allowing you to choose the right one for you whether you’re a first-time home buyer or a repeat buyer.