FAQ
Frequently Asked Questions
How do I know if I qualify for a mortgage?
Mortgage qualification is based on multiple factors, such as your credit score, income, debt-to-income ratio, employment history, and down payment amount. At In-House Mortgage, our team will walk you through the application process and inform you of the necessary documents.
How much of a down payment do I need?
The required down payment varies based on the type of loan. Conventional loans typically require as little as 3% to 5%, while FHA loans generally require 3.5%. VA and USDA loans often have no down payment requirement. For first-time homebuyers and eligible low-income clients, we offer down payment assistance programs that could cover the entire down payment, requiring zero out-of-pocket costs. Keep in mind that a larger down payment can lead to better loan terms.
What is PMI (Private Mortgage Insurance)?
PMI is usually required for conventional loans when the down payment is less than 20%. It serves to protect the lender if the borrower defaults on the loan. However, if you make a larger down payment or build enough equity in the property, PMI may not be necessary.
What is the difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?
A fixed-rate mortgage maintains the same interest rate throughout the loan term, ensuring consistent monthly payments. In contrast, an adjustable-rate mortgage (ARM) has an interest rate that may change after an initial fixed period, leading to potential fluctuations in monthly payments based on market conditions.
What is a pre-approval, and why is it important?
A pre-approval is an initial evaluation by a lender to estimate how much you may be able to borrow. This process includes a review of your income, assets, and credit history. Having a pre-approval letter can make your offer more competitive, demonstrating to sellers that you are a serious and financially qualified buyer.
How long does the mortgage approval process take?
The mortgage approval process generally takes between 30 to 45 days, though the timeline can vary based on the complexity of your application and the loan type. At In-House Mortgage, our team works diligently to streamline the process and ensure a smooth experience from start to finish.
What is an escrow account?
An escrow account is a separate account managed by your lender to cover property taxes, homeowner’s insurance, and other related expenses. A portion of your monthly mortgage payment is allocated to this account, ensuring these costs are paid on time when due.
What are closing costs?
Closing costs are expenses incurred when finalizing a mortgage, including loan origination fees, appraisal fees, title insurance, and attorney fees. Typically ranging from 2% to 5% of the loan amount, these costs should be considered as part of your overall home-buying budget.
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