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Mortgage Questions?
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Find answers to common mortgage questions and learn more about the home financing process in one convenient place. Browse topics covering mortgage fundamentals, credit, down payments, closing costs, VA and FHA loans, conventional and jumbo loans, investment programs, and more. Select any question to expand the answer, or use the category filters to quickly find information relevant to your needs. When you are ready to move forward, use the available options to apply, check your qualification, or connect with the mortgage team.
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All Questions
Mortgage Fundamentals
General Questions
DTI & Credit
Down Payments
Closing Costs
VA Loans
FHA Loans
Conventional Loans
Jumbo Loans
DSCR & Investment
Doctor Loans
Self-Employed Programs
Alternative Documentation

Mortgage Basics

What is a mortgage?
A mortgage is a loan used to purchase or refinance real estate. The property serves as collateral for the loan, and the borrower repays the amount borrowed, plus interest and applicable costs, over an agreed loan term.
A good first step is to review your finances and speak with a mortgage professional about your goals. A lender will typically review your income, assets, debts, credit history, and intended property type to determine which loan programs may fit your situation.
A mortgage preapproval is a lender’s preliminary review of your financial information to estimate how much you may be able to borrow. It is not a final loan approval because the property, documentation, underwriting, and other requirements still need to be reviewed.
The amount you can afford depends on your income, debts, credit profile, available funds, interest rate, property taxes, homeowners insurance, HOA fees, and other expenses. A mortgage affordability calculator can provide an estimate, but a lender can provide a more complete qualification review.
A mortgage payment may include principal and interest as well as property taxes, homeowners insurance, mortgage insurance, and HOA dues when applicable. Your actual payment depends on the loan amount, interest rate, loan term, property, and loan program.
Closing times vary based on the loan program, borrower documentation, appraisal, title work, property conditions, underwriting, and other factors. Your lender can provide a more specific timeline after reviewing your transaction.
The interest rate represents the cost of borrowing the principal amount. The annual percentage rate, or APR, incorporates the interest rate and certain loan costs to provide another way to compare mortgage offers.
A mortgage broker can help borrowers compare loan programs and pricing available through the lenders the broker works with. Available products, rates, fees, and qualification requirements vary by lender and borrower scenario.

Mortgage Rates

What are mortgage rates today?
Mortgage rates can change throughout the day and vary by loan program, credit profile, property type, loan amount, occupancy, down payment, and other factors. Check the current mortgage rate information on MortgageMarketUpdate.com or request a personalized quote for your specific scenario.
Mortgage rates are influenced by financial-market conditions and economic factors, including inflation expectations, bond-market movements, employment data, Federal Reserve policy expectations, and investor demand for mortgage-backed securities.
Your rate can be affected by your credit profile, loan type, down payment or equity, property type, occupancy, loan amount, loan term, points or credits, and current market conditions.
No one can reliably predict the exact direction or timing of future mortgage rates. Instead of relying only on forecasts, borrowers can compare available options, evaluate the total cost of the loan, and discuss rate-lock strategies with their mortgage professional.
A 30-year fixed-rate mortgage has an interest rate that remains fixed for the loan’s scheduled 30-year term. The principal-and-interest payment is generally stable, although the total monthly housing payment can change if taxes, insurance, HOA dues, or other charges change.
A rate lock protects an agreed interest rate for a specified period while the loan is being processed, subject to the lock’s terms and conditions. The right time to lock depends on your closing timeline, market conditions, and available lender options.

Credit, Income & Qualification

What credit score do I need to buy a home?
There is no single minimum credit score that applies to every mortgage. Requirements depend on the loan program, lender, automated underwriting findings, and the rest of your financial profile.
Your debt-to-income ratio compares certain monthly debt obligations with your qualifying gross monthly income. Lenders use DTI as one factor when evaluating whether you can reasonably manage the proposed mortgage payment.
There is no universal DTI limit for every mortgage. Acceptable ratios depend on the loan program, lender guidelines, automated underwriting findings, credit profile, reserves, and other compensating factors.
A housing ratio compares qualifying housing expenses with gross monthly income. A total DTI ratio generally compares housing expenses plus other qualifying monthly debts with gross monthly income. Which ratios are used and how they are evaluated depend on the loan program.
Common documents may include identification, income documentation, bank or asset statements, employment information, and information about existing debts. Requirements vary based on the loan program and how you earn your income.
Possibly. Mortgage programs have different credit requirements, and lenders consider more than a credit score alone. Income, debts, assets, payment history, loan type, and other factors may affect qualification.
Yes. Student-loan obligations can affect your DTI calculation. How the payment is calculated may depend on the loan program and the information appearing on your credit report or loan documentation.

Down Payments & Assistance

Do I need a 20% down payment to buy a home?
No. Many mortgage programs allow less than 20% down, and certain eligible borrowers may qualify for low-down-payment or no-down-payment financing. A smaller down payment can affect mortgage insurance, pricing, and other loan costs.
Some qualified borrowers may purchase a home with no down payment through programs such as eligible VA or USDA financing. Down payment assistance may also reduce the amount of cash some borrowers need, subject to program requirements.
Down payment assistance programs can help eligible homebuyers with down payment or closing-cost funds. Assistance may be structured as a grant, forgivable loan, deferred-payment loan, shared-appreciation program, or repayable second mortgage.
Eligibility varies by program and may depend on income, location, purchase price, first-time homebuyer status, occupancy, credit, education requirements, and the type of first mortgage being used.
Many mortgage programs allow eligible gift funds from acceptable sources. Documentation and donor requirements vary by loan program, so borrowers should confirm the rules before transferring funds.
Certain conventional mortgage programs may allow eligible borrowers to purchase a home with as little as 3% down. Eligibility depends on the specific program and borrower scenario.

Closing Costs

What are mortgage closing costs?
Closing costs are expenses associated with completing a mortgage transaction. They may include lender charges, appraisal costs, title and settlement fees, recording fees, prepaid interest, taxes, insurance, and other applicable expenses.
Closing costs vary significantly based on the loan amount, property location, loan program, lender, title or settlement provider, taxes, insurance, discount points, and other factors. Review your Loan Estimate for transaction-specific estimated costs.
It depends on the transaction and loan program. Certain costs may sometimes be financed in a refinance, while purchase transactions have different restrictions. Seller or lender credits may also be available in some situations.
Many mortgage programs allow sellers to contribute toward eligible buyer closing costs, subject to program limits and transaction requirements.

Cash to close is the estimated amount you need to bring to closing after accounting for your down payment, closing costs, prepaid expenses, deposits, credits, and other adjustments.

Conventional Loans

What is a conventional loan?
A conventional mortgage is a home loan that is not insured or guaranteed by a federal government agency such as FHA, VA, or USDA. Conventional loans include mortgages that meet Fannie Mae or Freddie Mac requirements as well as other conventional products.
Credit requirements vary by lender, loan product, and underwriting method. Although some conventional programs commonly use minimum credit thresholds, borrowers should not assume one score guarantees approval.
Certain conventional programs allow eligible borrowers to make a down payment as low as 3%. Eligibility and mortgage-insurance requirements depend on the specific program and borrower profile.
PMI generally protects the lender if a borrower defaults on a conventional mortgage. It is commonly required on certain conventional loans when the borrower has less than 20% equity at origination.
For many covered conventional mortgages, borrowers may request PMI cancellation when the scheduled principal balance reaches 80% of the home’s original value, provided applicable requirements are met. PMI generally terminates automatically when the scheduled balance reaches 78% of original value if the loan is current. Other investor or servicer rules may provide additional cancellation options.
For 2026, the baseline conforming loan limit for a one-unit property in most of the United States is $832,750. The one-unit ceiling in designated high-cost areas is $1,249,125. Limits can vary by county and property unit count.
Yes, conventional financing may be available for eligible second homes and investment properties. Down payment, reserve, credit, pricing, and other requirements can differ from primary-residence financing.

FHA Loans

What is an FHA loan?
An FHA loan is a mortgage made by an FHA-approved lender and insured by the Federal Housing Administration. FHA financing can offer lower down-payment options and flexible underwriting features for eligible borrowers. It is not limited to first-time homebuyers or lower-income borrowers.
FHA loans are available to eligible borrowers who meet FHA and lender requirements. Borrowers do not generally have to be first-time homebuyers, and FHA does not impose a general borrower income ceiling.
FHA policy permits maximum financing for borrowers meeting FHA’s applicable credit-score threshold and reduced financing at lower qualifying scores, but lenders may impose their own stricter requirements. Credit score is only one part of the qualification process.
Eligible FHA borrowers may qualify for a down payment as low as 3.5%. Borrowers with lower qualifying credit scores may be subject to a higher minimum investment, and lender requirements may also apply.

For FHA case numbers assigned in 2026, the one-unit FHA loan-limit floor is $541,287 and the one-unit high-cost-area ceiling is $1,249,125. The actual limit depends on the county and number of units, with special limits applying in certain areas.

FHA mortgages generally require an upfront mortgage insurance premium and an annual mortgage insurance premium collected through monthly payments. The amount and duration depend on the loan terms and applicable FHA rules.
Whether annual FHA mortgage insurance ends automatically depends on factors such as the loan’s origination date, original loan-to-value ratio, and loan term. Some borrowers may need to refinance into another loan type to eliminate FHA mortgage insurance.

FHA financing may be used to purchase eligible one-to-four-unit residential properties, provided FHA requirements are met and the borrower occupies the property as a principal residence.

An FHA 203(k) loan combines eligible home-purchase or refinance financing with funds for approved rehabilitation or repairs. FHA offers different 203(k) options depending on the scope of the project and applicable program requirements.

VA Loans

What is a VA loan?
A VA-backed home loan is a mortgage available to eligible Veterans, service members, and certain surviving spouses. VA guarantees part of the loan made by a private lender, which can provide eligible borrowers with benefits such as no required down payment in many cases and no monthly PMI.
Eligibility generally depends on qualifying military service, duty status, or surviving-spouse status. A Certificate of Eligibility, or COE, helps confirm whether a borrower has VA home-loan entitlement.
Yes. Eligible borrowers may use their VA home-loan benefit more than once. Available entitlement depends on previous VA loans and whether entitlement has been restored.
VA entitlement is the amount the Department of Veterans Affairs will guarantee to the lender on an eligible VA-backed mortgage. Your COE provides information about your entitlement.
The VA Funding Fee is a one-time fee that applies to many VA-backed and VA direct home loans. The amount depends on factors including loan type, previous use of the VA benefit, and down payment. Certain eligible borrowers are exempt.
Certain borrowers, including some Veterans receiving or eligible to receive VA disability compensation and certain surviving spouses, may be exempt. VA determines whether the exemption applies.
The Department of Veterans Affairs does not establish a minimum credit score for VA-backed home loans. Individual lenders may establish their own credit requirements.
Borrowers with full VA entitlement are not subject to a VA county loan limit, although the lender still determines how much the borrower qualifies to borrow. County conforming loan limits can matter when a borrower has remaining, rather than full, entitlement.
Certain surviving spouses may qualify for VA home-loan benefits. Eligibility depends on the circumstances and VA requirements, and an eligible spouse generally needs a Certificate of Eligibility.
A VA purchase loan is generally intended for a home the eligible borrower will occupy as a primary residence. An eligible multi-unit property may be possible when the borrower occupies one of the units, subject to VA and lender requirements.
In some circumstances, a borrower with remaining VA entitlement may be able to have more than one VA-backed loan. The available entitlement, occupancy requirements, qualification, and property circumstances must be reviewed.
A VA Interest Rate Reduction Refinance Loan, or IRRRL, is a refinancing option for an existing VA-backed mortgage. It is designed to refinance an eligible VA loan under VA requirements and is sometimes called a VA streamline refinance.
A VA-backed cash-out refinance may allow eligible borrowers to refinance an existing mortgage and potentially access home equity, subject to VA and lender requirements. The amount available depends on the property value, loan balance, qualification, and applicable guidelines.

USDA Loans

What is a USDA home loan?
The USDA Single Family Housing Guaranteed Loan Program helps eligible low- and moderate-income households finance a primary residence in an eligible rural area through approved lenders.
Eligibility includes requirements involving household income, property location, occupancy, and other USDA and lender guidelines.
Eligible USDA Guaranteed Loans can provide 100% financing, meaning no down payment may be required for qualified borrowers and eligible properties.
No. USDA eligibility is based on designated geographic areas, and many eligible locations include communities that borrowers may not consider traditionally rural. The property’s eligibility should be checked using USDA’s official eligibility resources.
Yes. USDA Guaranteed Loans have household-income requirements. For the guaranteed program, household income generally cannot exceed the applicable program limit for the area and household size.
USDA provides an official property eligibility tool where borrowers can enter an address or search the eligibility map. Eligibility should be confirmed for the specific property.

Jumbo Loans

What is a jumbo loan?
A jumbo loan generally refers to mortgage financing above the applicable conforming loan limit for the property’s location and unit count.
Whether a loan is considered jumbo depends on the applicable conforming loan limit. In 2026, the one-unit baseline conforming limit in most of the country is $832,750, while designated high-cost areas can have higher limits.
Requirements vary considerably by lender and product. Jumbo loans may have different standards for credit, down payment, reserves, income documentation, property type, and debt-to-income ratio than conforming mortgages.
Some jumbo programs have stronger credit requirements than standard conforming programs, but there is no single credit-score requirement that applies to every jumbo mortgage.
Potentially. Some jumbo products allow less than 20% down for qualified borrowers, although available options depend on the lender, loan amount, property, credit profile, and other factors.

Investor & DSCR Loans

What is an investment property loan?
An investment property loan is financing used to purchase or refinance real estate that is primarily held for rental income or investment rather than as the borrower’s primary residence.
A debt service coverage ratio, or DSCR, loan is an investment-property financing option that may qualify the transaction primarily using the property’s rental-income potential compared with its qualifying housing debt rather than relying primarily on the borrower’s personal income.
There is no universal DSCR requirement. Minimum ratios and calculation methods vary by lender, investor, property type, and loan program.
Some DSCR programs do not require personal tax returns to document qualifying income because qualification is based primarily on the property’s cash flow. Documentation requirements vary by lender and program.
Some DSCR programs allow eligible short-term rental properties, while others have additional restrictions or use different methods for determining qualifying rental income.
There is no single limit that applies to every DSCR program. Lenders and investors establish their own requirements involving property count, exposure, reserves, loan amounts, and borrower experience.

Self-Employed & Alternative Documentation

Can I get a mortgage if I'm self-employed?

Yes. Self-employed borrowers can qualify for many mortgage programs. The documentation and income-calculation method depend on the loan program, business structure, length of self-employment, and financial profile.

Requirements vary by loan program and borrower circumstances. Lenders generally review the history and stability of the business or self-employment income when determining whether the income can be used for qualification.
They can. Traditional mortgage underwriting commonly evaluates qualifying income using information reported on tax returns, so business deductions may affect the income used for qualification.
A bank statement mortgage is an alternative-documentation loan that may allow eligible self-employed borrowers to document qualifying income using personal or business bank deposits instead of traditional tax-return income calculations.
Calculation methods vary by lender and program. A lender may review qualifying deposits over a specified period and, for business accounts, apply an appropriate expense factor or other method to estimate qualifying income.
A profit-and-loss, or P&L, mortgage program may use a qualifying profit-and-loss statement to help document income for an eligible self-employed borrower. Documentation and eligibility requirements vary by lender and program.
A 1099 mortgage program may allow eligible independent contractors or other 1099 earners to document income using alternative methods rather than relying exclusively on traditional tax-return calculations.
Some alternative-documentation and Non-QM mortgage programs may allow qualified borrowers to document income through bank statements, P&L statements, 1099 income, property cash flow, or other permitted methods. These are not “no-documentation” loans, and requirements vary by program.

Doctor Loans

What is a doctor mortgage loan?
A doctor or physician mortgage is a specialized loan product offered by certain lenders for eligible medical professionals. Features vary by lender and may include different down-payment, student-debt, mortgage-insurance, or underwriting requirements.
Eligibility varies by lender. Depending on the program, eligible professions may include physicians, dentists, residents, fellows, and certain other medical professionals.
Requirements vary by lender and loan amount. Some physician mortgage programs offer low-down-payment options to eligible borrowers.
Treatment of student-loan debt depends on the lender and program. Certain physician mortgage programs may use underwriting rules designed for medical professionals with substantial student debt or future earning potential.
Some physician mortgage programs accept eligible residents and fellows, including borrowers who are beginning a new position, subject to lender documentation and qualification requirements.

Refinancing & Home Equity

What does it mean to refinance a mortgage?
Refinancing replaces an existing mortgage with a new loan. Borrowers may refinance to change their interest rate, loan term, monthly payment, loan type, or access equity, depending on their goals and qualification.
Refinancing may make sense when the expected financial benefit supports the costs and the borrower’s goals. Consider the new rate and payment, closing costs, break-even period, remaining loan term, equity, and how long you expect to keep the property.
Applying for a refinance generally involves a credit inquiry and opening a new mortgage account, which can affect your credit profile. The exact impact varies by borrower.
A rate-and-term refinance replaces an existing mortgage primarily to change the interest rate, loan term, or loan structure rather than to take significant cash out of the property’s equity.
A cash-out refinance replaces your current mortgage with a larger mortgage and provides eligible equity proceeds to you at closing, subject to loan-to-value, qualification, and program requirements.
A home equity line of credit, or HELOC, is a revolving credit line secured by your home’s equity. Borrowers can generally draw funds during an established draw period, subject to the terms of the HELOC.
A second mortgage is a loan secured by a property that is subordinate to an existing first mortgage. Depending on the product, it may provide funds as a lump sum or through a line of credit.

A HELOC is typically a revolving line of credit secured by home equity. A closed-end second mortgage generally provides a lump sum while leaving the existing first mortgage in place. A cash-out refinance replaces the existing first mortgage with a new, larger mortgage.

Some homeowners use a HELOC, second mortgage, or cash-out refinance to consolidate other debts. However, converting unsecured debt into debt secured by your home creates additional risk, and borrowers should compare interest costs, fees, repayment terms, and total cost before proceeding.
The amount of home equity you can access depends on the property’s value, existing mortgage balances, loan program, occupancy, credit profile, lender requirements, and maximum permitted loan-to-value or combined loan-to-value ratio.

First-Time Homebuyers

Who is considered a first-time homebuyer?
The definition can vary by mortgage or assistance program. Some programs consider a borrower a first-time buyer if they have not owned a principal residence during a specified prior period, while other programs use different definitions.
Yes. Eligible first-time buyers may have access to low-down-payment conventional programs, FHA financing, state or local assistance programs, grants, or other homebuyer programs.
No. Down payment assistance programs have their own eligibility requirements, which may include income limits, purchase-price limits, location, occupancy, homebuyer education, credit requirements, and other criteria.
No. FHA financing is not limited to first-time homebuyers. Eligible repeat buyers may also use FHA financing if they meet the applicable requirements.

Mortgage Insurance

What is the difference between PMI and FHA mortgage insurance?

PMI generally applies to certain conventional mortgages. FHA loans use FHA mortgage insurance, which follows different rules for premiums and cancellation. VA-backed loans do not require monthly PMI.

No. Mortgage-insurance requirements depend on the loan program. Many conventional loans with less than 20% down require PMI, FHA has its own mortgage-insurance system, while eligible VA loans do not require monthly mortgage insurance.
Mortgage insurance primarily protects the lender or mortgage investor against certain losses if the borrower defaults. It is different from insurance products designed to protect a borrower’s income, life, or ability to make payments.

Choosing the Right Mortgage

Which mortgage program is best for me?
There is no single mortgage program that is best for everyone. The appropriate option depends on your credit, income, debts, assets, property, occupancy, down payment, eligibility, expected time in the home, and financial goals.
The better fit depends on your credit profile, down payment, mortgage-insurance costs, loan amount, property, and long-term plans. Comparing both options using the same purchase scenario can help determine which structure better fits your needs.

A larger down payment can reduce the amount borrowed and may affect your monthly payment, mortgage insurance, pricing, and cash reserves. The right amount depends on your overall finances rather than simply putting down as much as possible.

Discount points allow borrowers to pay an upfront cost in exchange for a lower interest rate in certain situations. Whether paying points makes sense depends on the cost, rate reduction, expected break-even period, and how long you expect to keep the loan.
A shorter loan term generally has higher monthly principal-and-interest payments but can reduce total interest over the life of the loan. A longer term generally lowers the required monthly principal-and-interest payment but can result in more total interest paid.
Compare the interest rate, APR, lender fees, discount points or credits, mortgage insurance, cash to close, monthly payment, loan term, prepayment terms, and total cost. The Loan Estimate can help you compare offers using standardized information.
A mortgage professional can review your income, credit, debts, assets, property plans, occupancy, and financial goals to identify programs you may qualify for and explain the differences between available options. Final eligibility and loan terms depend on underwriting, program requirements, and lender approval.
Rodney Rose Mortgage Team
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Rodney Rose
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E: rrose@emortgagecapital.com
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