Mortgage FAQs:
Everything You Need to Know

A mortgage is a loan specifically for buying a home or real estate. The property itself acts as collateral, meaning the lender has the right to take ownership if the borrower cannot make the payments. Mortgages make it possible for homebuyers to finance a property without paying the full price upfront.

When you take out a mortgage loan, you borrow money from a lender to purchase a property. In return, you agree to pay back the loan amount with interest over a set period, usually 15 to 30 years. Each monthly payment goes toward both the principal (the loan balance) and interest, gradually increasing your ownership in the property until it’s fully paid off.

A fixed-rate mortgage keeps the same interest rate for the entire loan term, providing stable monthly payments. An adjustable-rate mortgage (ARM) starts with a fixed rate for an initial period, then adjusts periodically based on market rates. While ARMs often have lower starting rates, they carry the risk of rate increases over time.

The down payment requirement varies based on the loan type, lender, and borrower qualifications. Generally, a 20% down payment is standard, but options are available with as little as 3-5% down for conventional loans or even zero down for some VA or USDA loans. A higher down payment often results in a lower interest rate and eliminates private mortgage insurance (PMI).

Mortgage interest rates fluctuate based on market conditions, the loan type, and borrower factors like credit score and down payment. To find the current rates, it's best to contact your lender or check trusted financial sites for daily updates.

The mortgage approval process typically takes 30-45 days, but timing can vary based on factors like application complexity, loan type, and responsiveness in providing necessary documents. Some online mortgage services offer expedited approval processes that may take as little as a week.

Pre-qualification is an estimate of what you might be able to borrow based on self-reported financial information. Pre-approval is a more thorough process, requiring documentation to verify your income, credit, and assets, and it provides a firm loan amount you’re likely to be approved for, giving you an advantage when making offers.

Yes, most lenders offer online mortgage applications, making it convenient to apply from home. The online process often includes options for uploading documents and tracking the application, and some lenders even offer full digital mortgages with e-signatures to streamline the entire process.