Mortgage 101: Frequently-Asked-Questions

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Read some of the most frequently asked mortgage questions from homebuyers. For more “Mortgage 101” information, learn about our Mortgage Process, explore our Loan Products, or read our educational articles.

Should I buy a house now, or wait?

The likely answer is now. If you’re ready for home ownership, history says that real estate will continue to appreciate in value. Buyer’s markets, seller’s markets, and interest rates will always go through cycles.

What is the difference between a pre-qualification and a pre-approval?

A pre-qualification isn’t an official statement on whether you qualify for a mortgage. It’s the loan officer’s best estimate according to the information you provide. A pre-approval requires a hard credit pull and full application. It is a more confident assessment of your ability to buy a home.

How long will it take to complete the mortgage process?

If all goes smoothly on the buyer’s and seller’s end, Fairway of the Rockies can close loans within two weeks. This timeline is based on a completed application to clear-to-close. The national average is usually closer to a month.

What’s the minimum down payment required?

If you qualify for a zero-down loan program’s terms, such as a USDA or VA loan, you may not have to put any money down. If you’re suited for an FHA or conventional loan, your down payment requirement may be as low as 3.5 or 5%, respectively.

What are your interest rates?

We aim to keep interest rates competitive with nationwide rates. Rates change on a daily basis. They also depend on your financial profile as a borrower. For specific information, please contact us.

When should I lock my interest rate?

Since no one can predict the future of interest rates, it’s best to lock your rate when you feel comfortable with the monthly payment.

What makes one mortgage lender better than another?

It comes down to pricing, speed, and service. We understand that interest rates, closing costs, and fees are important considerations. Our ability to help you to the finish line in an orderly, professional manner should also be of top importance. You need an honest, dependable lender who won’t drop the ball after you’ve found the perfect home.

Is there a minimum income limit when qualifying for a mortgage?

There is often no minimum income requirement for mortgage qualification. The key factor is weighing the monthly mortgage payment against your income and debt. Mortgage lenders are generally looking for a debt-to-income ratio (including your future mortgage) within the low forties.

For example, if your monthly income were $10,000 with no revolving debt involved, you may be qualified for a home purchase landing you near a $4,200 per-month payment. This will not always be the case, however.

How much home can I afford?

In theory, you can afford up to the purchase price your mortgage is approved for. This may be around forty percent of your before-tax income. It depends on how you personally define “afford”. If you want lots of extra funds each month for travel, you may not want to spend as much on a home.

How do I know which mortgage program is best for me?

Consider the benefits and drawbacks to each program. It’s all about finding the right mix between qualification requirements, benefits, and drawbacks. Your first step is getting in touch with a knowledgeable mortgage planner.

Have other questions?

Feel free to contact one of our offices by phone. Or, give us some quick information about yourself and we’ll reach out to you.

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