Frequently Asked Questions

Before getting a mortgage, it’s crucial to understand the key factors that will affect your loan, monthly payments, and overall financial situation. Below are 10 essential questions to ask. You can also ask Betty about how any of these questions apply to you specifically

How Much Can I Afford?

Lenders typically use the 28/36 rule:
- No more than 28% of your gross monthly income should go toward housing expenses.
- No more than 36% should go toward total debt (including mortgage, car loans, credit cards, etc.).
Use a mortgage calculator to estimate your monthly payment, property taxes, and insurance costs.

How much do I need for a down payment?

20% down avoids private mortgage insurance (PMI), but many loans allow lower down payments:
- FHA loan: 3.5% down
- Conventional loan: 3-5% down (with PMI)
- VA/USDA loans: 0% down (if eligible)

What Type of Mortgage is Best for Me?

Fixed-rate mortgage (consistent monthly payments, good for long-term stability).
Adjustable-rate mortgage (ARM) (lower initial rate, but can increase later).
FHA, VA, or USDA loans (government-backed options with lower down payments for eligible borrowers).
Jumbo loans (for higher-priced homes that exceed conventional loan limits).

What will my interest rate and APR be?

Interest rate affects your monthly payment.
APR (Annual Percentage Rate) includes lender fees and closing costs—helps compare loan offers more accurately.

What are the closing costs?

Typically 2-5% of the home price (appraisal, title insurance, loan origination fees, etc.).
Ask if seller concessions or lender credits are available to help cover costs.

How will my credit score affect my mortgage?

Higher credit scores = lower interest rates.
Generally, 740+ gets the best rates, but many programs accept scores as low as 580 (FHA) or 620 (conventional loans).

Do I need to get pre-approved?

Pre-approval shows sellers you’re serious and tells you how much you can borrow.
Lenders check credit, income, debt, and assets during this process.

Will my mortgage payment change over time?

Fixed-rate loan = payment stays the same.
Adjustable-rate mortgage (ARM) = could go up after the introductory period.
Property taxes and homeowners insurance may increase over time, raising your total monthly payment.

Are there any penalties for early payment?

Some loans have prepayment penalties if you pay off the mortgage early.
Ask your lender if there are fees for extra payments or refinancing later.

How long does the loan process take?

Usually 30-45 days from application to closing.
Delays can happen if paperwork is incomplete, appraisals come in low, or underwriting takes longer than expected.