Frequently Asked Questions

Conventional mortgages are loans that aren’t guaranteed or insured by the federal government. Also known as a conforming mortgage, the conventional loan complies with the parameters set by Freddie Mac and Fannie Mae. You may obtain either an adjustable or fixed rate while your maximum loan amount is determined by the county and state of the home. The 2022 Conventional loan limit is $647,200.

A Conventional mortgage can benefit an individual whether they are a first-time buyer or in the process of refinancing. This loan option has a minimum down payment of 3% and typically requires a 620 credit score.

The Federal Housing Administration offers loans for existing or new home purchases as well as programs for home repairs. The FHA is a government agency inside the U.S. Department of Housing and Urban Development. An FHA loan is a type of mortgage that is insured by the Federal Housing Administration. Borrowers are required to pay for mortgage insurance so the lender is protected from a loss if the borrower happens to default on the loan itself. An FHA loan has a minimum down payment of 3.5%.

The VA loan is an unmatched home loan for veterans, service members, and military families. There are many benefits to the VA loan, such as:

  • No down payment
  • lower credit scores are accepted
  • no private mortgage insurance
  • and more!

The VA loan features competitive rates and terms while allowing qualified borrowers to purchase a home with little to no money out of pocket. Service-connected disabled Veterans are also exempt from the VA funding fee.

VA mortgages are labeled as the best mortgage option for eligible veterans or active duty military personnel looking to buy a home.

  • You are on active duty and have served 181 continuous days.
  • You completed 181 days of active-duty service or six creditable years in the Selected Reserve or National Guard.
  • You are the surviving spouse of a veteran who died while in service or from a service-connected disability and you have not remarried.
  • You remarried after age 57 or Dec. 16, 2003. Spouses of service members missing in action or prisoners of war are also eligible.

A down payment is the amount of your own money that you put towards the house right away. It’s an upfront payment that determines how much your principal will be.

  • Conventional Loan: Minimum down payment of 3% For income qualifying borrowers and first-time home buyers or 5% for everyone else.
  • FHA Loan: Minimum down payment of 3.5%
  • VA Loan: $0 down
  • USDA: $0 down
  • Private Mortgage Insurance, also called PMI, is a type of mortgage insurance you might be required to pay if you have a Conventional loan. PMI is generally required when. you have a Conventional loan and make a down payment of less than 20% of the home’s purchase price.
  • Mortgage Insurance Premium, or MIP, is a type of mortgage insurance that you are required to pay on FHA loans. There is an upfront MIP paid at closing (or financed into the loan) and monthly payment. USDA loans have the same requirements, but they are referred to as the loan guarantee fee and the annual fee (paid monthly).
  • VA is the only loan that does not have monthly mortgage insurance regardless of the down payment. VA does have a funding fee that is paid at closing (or financed into the loan) unless the Veteran has a service-connected disability and then they are exempt.

Refinance FAQ’s

APR is the annual cost of a loan to a borrower — including fees. The APR is expressed as a percentage. Unlike an interest rate, it includes other charges or fees such as mortgage insurance, most closing costs, discount points, and loan origination fees.

Closing costs and Prepaids come from a myriad of transactions that occur during the mortgage process. Loan costs include any origination fees, the appraisal, and the title work typically done by an attorney. Other costs include prepaid such as your first year of homeowner’s insurance. Typically, closing costs calculate out to be around 3-5% of the purchase price of the home.

Sellers can offer to cover the closing costs during negotiations.

Yes, until the funding of your refinance is done, you still are required to make your mortgage payments. All refinances have a 3-day waiting period after closing before they fund called a Right of Rescission. This was established by the Truth in Lending Act and gives the borrower the ability to cancel the loan within that time frame.