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FAQ

Knowing the answers to your mortgage questions can empower you to make smart decisions, whether you’re buying your first home or interested in refinancing your current mortgage.

     Learning about your different mortgage options before you meet with a lender can help you get the best deal on a house that will benefit your family for years to come. Here are some common mortgage questions you may have during the home-buying or refinancing process.

 

1. How do you qualify for a loan?

The idea of meeting with a lender can be intimidating, especially if you’re buying your first home. After all, this is probably the biggest purchase you’ll ever make! Think of your first meeting with a lender as a get-to-know-you session. They’ll simply want to learn a few basics about you and your financial situation. Then comes the paperwork! Once your loan process gets started, be prepared to provide proof of:

  • Where you work
  • Your income
  • Any debt you have
  • Your assets
  • How much you plan to put down on your home

Kwest Mortgage will clearly explain your mortgage options and answer all your questions so you feel confident in your decision.

 

2. Can you get a mortgage without a credit score?

This is one of the most commonly asked mortgage questions. If you’ve paid off all your debt—and I recommend you do before buying a home—it is possible you won’t have a credit score when you meet with a lender. But don’t worry; you can still get a mortgage.

If you apply for a mortgage without a credit score, you’ll need to go through a process called manual underwriting. Manual underwriting simply means you’ll be asked to provide additional paperwork for the underwriter to review personally. 

 

3. What’s the difference between being prequalified and preapproved?

A quick conversation with your lender about your income, assets and down payment is all it takes to get prequalified. But if you want to get preapproved, your lender will need to verify your financial information and submit your loan for preliminary underwriting. A preapproval takes a little more time and documentation, but it also carries a lot more weight.

Which is better? Think of prequalification as an initial step and preapproval as the green light signaling that you’re ready to start your home search. When sellers review your offer, a preapproval means you’re a serious buyer whose lender has already started the loan process.

 

4. How much should you save for a down payment?

I recommend putting at least 10% down on a home, but 20% is even better because you won’t have to pay private mortgage insurance (PMI). PMI is an extra cost added to your monthly payment that doesn’t go toward paying off your mortgage. It’s worth putting a big down payment and here’s why:

  • You’ll have built-in equity when you move into your home.
  • You can finance less, which means you’ll have a lower monthly payment.

On the flip side, if you buy a home with little to no down payment and the market dips, you could be stuck until home values recover.

 

5. How do you know which home mortgage option is right for you?

With so many mortgage options out there, it can be hard to know how each would impact you in the long run. Here are the most common mortgage loan types: