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31 questions
- Credit score
What credit score do I need to buy a home?
It depends on the loan program. Different programs have different floors and pricing tiers.
There isn't one universal score. Conventional, FHA, VA, jumbo, and DSCR each have their own minimum-score thresholds and pricing tiers. A higher mid-FICO usually improves both eligibility and pricing — but the right answer depends on the full file: credit profile, down payment, debt ratio, and loan program.
What can changeLender overlays, program guideline updates, the specific loan amount and LTV, and current pricing. The actual minimum and pricing for your scenario must be verified.
Related - Credit score
Does my credit score affect my mortgage rate?
Yes — credit is one of the largest pricing inputs.
Mortgage pricing uses the borrower's credit profile as a major input. Stronger profiles tend to receive better pricing; weaker profiles typically receive higher rates or higher costs to reach the same rate. The size of the impact depends on the program, the loan-to-value, and current market pricing.
What can changePricing tables, lender overlays, and where your file falls on the credit-LTV grid. Two files with the same FICO can price differently based on the rest of the structure.
Related - Credit score
How can I prepare my credit before applying?
Pay on time, keep balances low, and don't open new accounts mid-process.
Most lenders look at the middle of your three FICO scores. The cleanest preparation is consistent on-time payment, keeping revolving balances well under their limits, and avoiding new credit inquiries or new accounts in the months before and during the loan process. Small structural moves on existing accounts can sometimes help — but those should be modeled with a loan officer, not guessed at.
- Down payment
How much down payment do I need?
It depends on the loan program and the property type.
Conventional, FHA, VA, jumbo, and investment loans all have different minimums. VA can go to 0% for eligible borrowers; FHA is typically lower than conventional minimums; jumbo and investment loans usually expect more down. The right minimum for your file depends on the program, property type, occupancy, and credit profile.
What can changeProgram guidelines, lender overlays, mortgage insurance cost at low down payments, and how seller credits or gift funds factor into your specific scenario.
Related - Down payment
Can I use gift funds for my down payment?
Often yes — with documentation requirements that vary by program.
Most loan programs allow gift funds from approved sources (typically family members) toward down payment and sometimes closing costs. The donor and the borrower both have to provide specific documentation — usually a signed gift letter, evidence of the donor's funds, and a paper trail of the transfer. Investment-property loans tend to be stricter.
What can changeAcceptable donor relationships, required documentation, and minimum borrower contribution all vary by program and lender overlay.
- Down payment
What is PMI and when is it required?
Private mortgage insurance is typically required on conventional loans with less than 20% down.
PMI protects the lender, not the borrower. On conventional loans, it's commonly required when the loan-to-value is above 80%. PMI cost depends on credit profile and loan-to-value, and it can usually be removed once equity reaches the program's threshold — but the exact removal mechanics depend on program rules and the type of MI carried.
What can changePMI factors, removal mechanics, and timeline rules. FHA mortgage insurance behaves differently from conventional PMI.
Related - Income and employment
How long do I need to be at my job?
There's no single rule. Most programs look at a two-year work history, but recent job changes can be acceptable.
Underwriting typically reviews a roughly two-year employment history rather than tenure at one specific job. Recent changes — promotions, lateral moves in the same field, or a return from school — are often workable. The bigger underwriting question is whether the income is stable and likely to continue.
What can changeProgram rules on continuity-of-income, gaps in employment, and how new income types are documented.
- Income and employment
Can I include bonus or overtime income?
Often yes, when there's a documented history and a reasonable expectation of continuance.
Variable income — bonus, overtime, commissions — can typically be used to qualify when there's a documented two-year history and the underwriter believes it will continue. Calculation methods vary by program. The amount you can use isn't always the most recent number; it's often an average.
What can changeCalculation methodology, required documentation, and how recent changes in pay structure are treated.
- Self-employed and 1099
Can I qualify for a mortgage as a 1099 contractor?
Yes — but the documentation and qualifying-income calculation differ from W-2.
1099 / self-employed borrowers can qualify under standard programs, with documentation that typically includes business and personal tax returns, year-to-date profit-and-loss, and bank statements. Qualifying income is usually averaged across two years, and write-offs that lower taxable income usually lower qualifying income too. Bank-statement and DSCR loans exist for cases where tax-return income doesn't reflect actual cash flow.
What can changeProgram documentation requirements, income calculation methods, and whether non-QM products are appropriate for the file.
Related - Self-employed and 1099
What documents do self-employed borrowers usually need?
Personal and business tax returns, year-to-date P&L, business bank statements, and the borrower's standard income / asset documentation.
Standard self-employed documentation usually includes the most recent two years of personal and business tax returns, a current year-to-date profit-and-loss statement, and business bank statements. Borrowers with multiple entities may need additional documentation for each entity. Specific requirements depend on program and structure.
- Investment property
How much down do I need for an investment property?
Investor down payment expectations are higher than primary-residence loans.
Non-owner-occupied / investment loans typically require more down than primary-home loans, and pricing is usually higher to reflect the added risk. Exact minimums depend on program (conventional investor, DSCR, portfolio), credit profile, property type, and number of units.
What can changeProgram-specific minimum-down requirements and pricing adjusters; reserve requirements; and rental-income treatment.
Related - Investment property
Can rental income help me qualify?
Often yes — using market rent or actual rent depending on the situation.
Rental income can typically be used to qualify, with the calculation method depending on whether the property is currently rented (using a lease) or being purchased (using market rent from an appraiser's rent schedule). DSCR programs qualify the borrower entirely on the property's cash flow rather than personal income.
What can changeHow rental income is documented and what percentage is used after vacancy / maintenance assumptions; rules vary by program.
- Conventional loans
What is a conventional loan?
A conforming or non-conforming mortgage that is not insured or guaranteed by a government agency.
Conventional loans are originated under guidelines used by Fannie Mae and Freddie Mac (conforming) or by individual lenders (non-conforming). They are not insured by FHA, guaranteed by VA, or backed by USDA. Conventional is often the long-term cost play when the borrower's credit, income, and down payment support it.
Related - Conventional loans
When does conventional make more sense than FHA?
Often when credit and down payment support it, because of how mortgage insurance behaves over time.
Conventional often wins on long-term cost when the borrower's credit and down payment qualify for favorable conventional pricing and PMI, because conventional PMI can typically be removed once equity reaches the threshold. FHA is often the better access path when credit or cash to close is tighter, but FHA mortgage insurance behaves differently and exit planning matters.
Related - FHA loans
What is an FHA loan?
A government-insured mortgage with more flexible credit and down-payment access.
FHA loans are insured by the Federal Housing Administration. They typically allow lower down payments and more flexible credit profiles than conventional, in exchange for FHA mortgage insurance (both upfront and monthly). FHA is often the right access path when credit or cash is tighter — but the exit plan matters because FHA mortgage insurance often persists longer than conventional PMI.
Related - FHA loans
Does FHA mortgage insurance ever go away?
In many scenarios, FHA monthly MI is intended to persist for the life of the loan; removal usually requires a refinance.
FHA mortgage insurance behavior depends on the case-number era and the original loan-to-value. In many recent FHA loans, the monthly MI is designed to persist for the life of the loan, meaning removal typically requires refinancing into a conventional loan once equity and credit support it. The mechanics differ from conventional PMI removal.
What can changeFHA case-number era rules, current FHA guidelines, and the borrower's specific MIP terms — these need verification for the actual loan in question.
- VA loans
Who qualifies for a VA loan?
Eligible service members, veterans, and qualifying surviving spouses with a Certificate of Eligibility.
VA loans are available to eligible active-duty service members, veterans, and certain surviving spouses, based on service criteria the VA establishes and verifies through the Certificate of Eligibility (COE). Eligibility itself doesn't determine pricing or approval — those still require credit, income, and underwriting review.
What can changeService-eligibility rules, COE issuance, and how remaining entitlement interacts with an existing VA loan.
Related - VA loans
Do VA loans require a down payment?
Often no — eligible borrowers with sufficient entitlement can typically purchase with no down payment.
VA loans frequently allow 0% down for eligible borrowers with full entitlement remaining. A VA funding fee may apply (some borrowers are exempt), and entitlement math matters when there's an existing VA loan in place. The property and condo project, if applicable, must also be VA-eligible.
- Loan limits
What is a conforming loan limit?
The maximum loan amount eligible for purchase by Fannie Mae or Freddie Mac in a given county.
Conforming loan limits are the largest loan amounts that meet conventional Fannie Mae / Freddie Mac criteria. They're set per county and updated annually. Loans above the conforming limit are typically jumbo loans, which carry their own underwriting and pricing rules.
What can changeAnnual limit updates and county-specific high-balance thresholds. Verify the current year's limits for your county before relying on a number.
Related - Mortgage rates
Why do mortgage rates change?
Mortgage rates move with bond market pricing — particularly mortgage-backed securities — which reacts to inflation, jobs data, and Fed policy.
Mortgage rates are driven primarily by the bond market — specifically the pricing of mortgage-backed securities (MBS). Inflation expectations, jobs data, Fed posture, and macro signals all push that pricing around. Rates can move within a single day. Headline rates aren't quotes — they're snapshots.
Related - Mortgage rates
Should I lock my rate?
It depends on whether the numbers work today and on your tolerance for the risk that they don't tomorrow.
If the rate, payment, and total cost work today and the closing window is reasonable, locking removes the risk of rates moving against you. Floating without a plan can be risky in a market that's sensitive to inflation and Fed commentary. The honest answer depends on your scenario and timeline — not on a one-size-fits-all rule.
Related - Mortgage rates
Should I pay points for a lower mortgage rate?
It depends how long you expect to keep the loan and how much the lower payment saves you each month.
Points are an upfront cost paid to lower the interest rate. The key question is break-even: how many months it takes the monthly payment savings to recover the upfront cost. If you'd refinance or sell before that point, paying points usually doesn't pay you back. If you plan to keep the loan well past the break-even, paying points can make sense — but the right call depends on your full scenario, not on a headline rate.
What can changeLoan amount, rate difference, point cost, how long you keep the home or the loan, the chance of refinancing, and how much cash you have available for closing all move the math.
- Mortgage rates
What is the difference between rate and APR?
Rate is the cost of the money. APR is a broader cost figure that includes some financing charges.
The interest rate is what determines the principal-and-interest payment. APR (annual percentage rate) is a separate calculation that incorporates certain finance charges — points, lender fees, and similar costs — to produce a single comparison number. APR isn't the same as rate; both should be considered when comparing offers.
- Closing costs
What are typical closing costs in Florida?
Closing costs include lender fees, title and settlement charges, recording and tax stamps, prepaid items, and reserves.
Florida closing costs typically include lender origination and underwriting fees, title insurance and settlement charges, government recording charges and documentary stamps, prepaid items (interest, insurance, taxes), and any required escrow reserves. The total varies materially by purchase price, loan program, and county.
What can changeCounty-specific recording fees, current insurance rates, lender pricing, and seller-credit strategy all move the final number.
Related - Closing costs
Can the seller pay my closing costs?
Often yes — within program-specific limits — when negotiated into the contract.
Most loan programs allow seller-paid closing-cost concessions up to a program-defined limit, typically expressed as a percentage of the purchase price and varying by occupancy and loan type. The credit must be negotiated into the purchase contract to be usable at closing.
What can changeProgram-specific concession caps, occupancy / down-payment-tier rules, and how concessions are documented in the contract.
- Closing costs
What is a lender credit?
Money the lender contributes toward closing costs in exchange for accepting a higher rate.
A lender credit is offered in exchange for a higher note rate. Same loan, different shape: lower upfront cost, higher monthly payment. The right tradeoff depends on how long you plan to keep the loan, your cash to close, and whether the higher payment fits your budget.
Related - Pre-approval
What is the difference between pre-qualification and pre-approval?
Pre-qualification is informal and usually based on stated information. Pre-approval involves verified documentation and credit review.
Pre-qualification is typically a quick, informal estimate based on what the borrower says is true. Pre-approval involves the lender actually pulling credit and reviewing documents. A real pre-approval letter — backed by a documented file — carries more weight in a Florida purchase market than a basic pre-qualification.
- Pre-approval
How long is a pre-approval good for?
Commonly around 60–90 days, but it depends on lender and program.
Pre-approval letters typically have an expiration window of roughly 60–90 days. Once the letter expires, the lender will usually need to re-verify credit, income, and employment to keep the file current. Material changes to credit, income, or assets during that window can trigger a re-underwrite.
- Refinance
When does a refinance make sense?
When the savings, costs, loan size, and expected time in the loan all line up.
A refinance makes sense when the math works on total cost — not just on a one-line monthly-payment comparison. The honest test is the break-even: how long it takes the monthly savings to recover the cost of the refinance, and whether you'll keep the loan past that point.
Related - Refinance
What is a break-even on a refinance?
The number of months it takes the monthly savings to recover the cost of the refinance.
Break-even is the simple test: divide the cost of the refinance by the monthly payment savings. The result is the number of months you need to keep the new loan for the refinance to mathematically pay you back. If you'd refinance or sell again before that point, the math typically doesn't work.
- Refinance
Can I take cash out when I refinance?
Often yes, when there's enough equity and the program allows cash-out at your loan-to-value.
Cash-out refinances let homeowners pull equity into a new loan, subject to program-specific maximum LTV limits and pricing. Cash-out is generally priced higher than a rate-and-term refinance and has stricter underwriting. The right amount to take depends on the use of funds, the math on total cost, and the alternatives (HELOC, home equity loan, etc.).
What can changeProgram max-LTV limits, pricing adjusters, occupancy / property-type rules, and reserve requirements.
Ask Shahram directly.
The messy ones — the in-between cases, the “is this even possible” questions — usually get a faster, clearer answer in conversation than in a library entry.
This page is general mortgage education only. It is not loan approval, not a commitment to lend, and not an underwriting decision. Final approval depends on verified documents, automated underwriting, lender overlays, property details, credit, income, assets, occupancy, loan program, and current guidelines.