Most lenders suggest the "31/43 Rule." This means your monthly mortgage payment (including taxes and insurance) should not exceed 31% of your gross monthly income, and your total debt payments shouldn't exceed 43%. With certain loan programs, that 43% rule can go all the way up to 55%, so be sure to talk to your lender about the Debt-to-Income requirements of the loan you're shopping for.

While a handful of people can qualify for an FHA loan with a score as low as 580, most conventional loans require at least a 620. For the best interest rates, you’ll typically want a score of 740 or higher.

A DTI of 43% or lower is considered excellent. Many conventional programs allow up to 43–50%, and FHA loans can sometimes go as high as 55% with "compensating factors" like high cash reserves.

No, 20% is not required! Many first-time buyers use programs with as little as 3% or 3.5% down. VA and USDA loans even offer 0% down options for those who qualify. Some Downpayment Assistance programs offer 0% down options, however you still must pay for the Earnest Money Deposit, the appraisal, and closing costs, so it is not actually $0 out of pocket.

The best way to make the downpayment and closing costs is to call your title company and ask for their wiring instructions. DO NOT wire money to anyone who calls you to give you the information since scammers are known to do this, and do not get the wiring instructions from anyone other than the title company you are using. Use the official phone number for the title company and call them and ASK for wiring instructions. You cannot use a check or money orders for a downpayment or closing costs. You can also use a cashier's check from your bank, but this means physically going into the bank during business hours to do so.

Downpayment Assistance (DPA) programs are grants or low-interest second loans provided by state or local housing authorities to help buyers cover upfront costs. Eligibility is usually based on income, credit score, and location.

You’ll provide a lender with your financial documents (pay stubs, tax returns, bank statements). They will verify your income, assets, and credit to provide a written commitment of how much they are willing to lend you.

Pre-qualification is a "ballpark" estimate based on information you provide verbally. Pre-approval is a formal commitment where the lender has actually verified your credit and documentation. In a competitive market, a pre-approval is a must.

Generally, you’ll need 30 days of pay stubs, two years of W-2s, and two months of bank statements with no NSF charges.

Yes! You will typically need to show two years of consistent self-employment income through tax returns, bank statements, or 1099's. Lenders look at your "net" income (after business expenses), so it's helpful to discuss this early in the process. Some programs like 1099 Programs can use a 10% Expense Factor by default, allowing you to qualify even if you have negative Adjusted Gross Income on your tax returns, as long as your 1099s are enough to cover DTI requirements.

Lenders include your monthly student loan payment in your DTI ratio. If you are on an Income-Driven Repayment (IDR) plan, many loan programs allow us to use that lower payment amount instead of a flat percentage of the balance, but each situation is different so be sure to ask your Loan Officer.

The fastest ways are to pay down credit card balances to under 30% of their limit, avoid opening new credit lines, and dispute any errors on your report. Even a small balance reduction can jump your score in 30 days.

Rates change daily based on the bond market and economic data. Mortgage interest rates are NOT tied directly to the "Fed" rate like some people think. Instead, they are directly proportional in an inverse way with the Mortgage Backed Securities Bond Market. When bonds go up, mortgage interest rates go down, but when bonds go down then mortgage interest rates go up. It's kind of like a see-saw on the playground, with bonds on one side and mortgage interest rates on the other.

A 30-year loan offers lower monthly payments and more flexibility. A 15-year loan has a lower interest rate and builds equity much faster, but requires a significantly higher monthly payment. A 30 year loan is paid over 360 months and a 15 year loan is paid over 180 months, therefore the 15 year loan has a higher payment even though the interest rate it lower than a 30 year loan.

An ARM offers a lower "teaser" rate for an initial period (like 5 or 7 years) before adjusting. It’s a tool for buyers who plan to sell or refinance before the rate adjusts, but it does carry the risk of higher future payments. If you know for certain you will be selling your house in 5 years or less, this is an option to consider.

No, it does NOT! The "guarantee" is to ensure the lender gets their money back if the borrower defaults on their loan. It is a guarantee for the lender, NOT the borrower.

Absolutely NOT! If you spend your Gift of Downpayment you receive from a family member or friend, then you will not have a downpayment for your home and will then have to go back to the friend or family member and ask for more money since you spent the downpayment money.

FHA loans are government-backed loans designed for buyers with lower credit scores or smaller down payments (3.5%). They are very popular for first-time homebuyers.

VA loans offer 0% down payment and no private mortgage insurance (PMI) for eligible veterans and service members. It is arguably the best mortgage product available today for veterans.

USDA loans offer 0% down for homes in designated "rural" areas. Eligibility is based on both the property location and household income limits.

Property Lookup - https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp

Income Limit Lookup - https://eligibility.sc.egov.usda.gov/eligibility/incomeEligibilityAction.do?pageAction=state

A jumbo loan is required when the loan amount exceeds the "conforming loan limits" set by the government (currently over $832,750 in most areas as of 2026). These typically require higher credit scores and larger down payments.

A rate lock guarantees your interest rate won't change between your application and closing. Locks typically last 30, 45, or 60 days. The longer the rate lock in days, the higher the interest rate since it is a higher risk for the lender.

Paying "discount points" means paying more upfront at closing to lower your monthly interest rate. This makes sense if you plan to stay in the home long enough for the monthly savings to outweigh the initial cost. For every 1 point (1% of loan amount) you pay upfront, there is approximately a .25% reduction in the interest rate.

Typically, closing costs range from 2% to 5% of the home's purchase price. This covers lender fees, title insurance, appraisals, and government recording fees. You must also add 15 months of homeowner's insurance and 5 months of property taxes to what you pay at closing, and while there are not exactly "closing costs" per say, they are considered "prepaid items" and are required upfront at closing. Some loans do allow the seller to pay a portion of the closing costs and prepaids, so talk to your lender about these options.

PMI protects the lender if you put down less than 20%. Once your home equity reaches 20% (either through payments or market appreciation), you can usually request to have it removed. Once your home equity reaches 22%, PMI will be automatically dropped.

PITIA stands for Principal, Interest, Taxes, Insurance, and Association Fees (if applicable) . This represents your total monthly housing obligation.

This varies wildly by county and state. A good rule of thumb is 1% to 2% of the home’s value per year, but we will provide an exact estimate based on the specific home you are eyeing. If you have your taxes "escrowed" this means you make monthly tax payments to the lender who will in turn will make the tax payment for you once a year.

An escrow account is a "holding tank" managed by your lender. You pay a portion of your taxes and insurance each month with your mortgage payment, and the lender pays those bills for you when they are due.

Yes. Unlike the appraisal (which is for the lender), the inspection is for you. It usually costs $300–$600 and is paid directly to the inspector at the time of service. The inspection is optional, but strongly suggested for your protection.

A property survey is a professional drawing that defines the exact legal boundaries of your land. A licensed surveyor visits the property to identify property corners, structures, fences, driveways, and any "easements" (areas where utility companies or neighbors may have access rights). Lenders and title companies require a survey to ensure the house you are buying is actually located on the lot described in the deed and to confirm there are no "encroachments"—like a neighbor’s shed or fence sitting on your property. In Texas, it is standard that the survey is paid for by the seller. If there is an old survey that is less than 10 years old we can sometimes use that.

An appraisal is an unbiased professional opinion of a home's value, required by the lender to ensure the property is worth the sales price. An appraiser calculates this value by comparing the home to similar properties that have sold nearby recently (usually within the last 6 months), known as "comps." They adjust the value based on:

Square footage and the number of bedrooms/bathrooms.

Condition and age of the home and its major systems (HVAC, roof).

Upgrades like modern kitchens, finished basements, or pools.

Location factors such as school districts or proximity to busy roads.

The homebuyer pays for the appraisal up front once the "option period" has expired on the purchase contract. The appraisal can be anywhere from $500 to $1000 depending on the type of property and where it is located.

The Option Period is explicitly stated in the purchase contract, and it is the time allotted to the homebuyer to do their due diligence and have an inspection done, and the homebuyer can pull out of the transaction at any time during the option period without losing their Earnest Money.

The Earnest Money Deposit, also called Earnest Money, is the good faith deposit you put down on the property to let the seller know you are serious about buying it. If you back out of the deal after the option period, the seller gets to keep this Earnest Money.

You can use a "bridge loan," a HELOC on your current home for the down payment, or make your new purchase offer "contingent" on the sale of your current home.

A bridge loan is a short-term loan (usually 6–12 months) that "bridges" the gap between buying a new home and selling your old one. They often have higher interest rates and fees because of their short-term nature.

Underwriting usually takes 3 to 10 business days depending on the lender, but the entire "contract to close" period typically spans about 30 days.

You will sign the final loan documents, pay your down payment and closing costs (usually via wire transfer), and—once the loan is funded and recorded—get your keys!

The most common culprits are new debt (like buying a car), a change in job status, or a large, unexplained deposit into your bank account. Avoid major financial changes until the keys are in your hand!

"Clear to close" means the lender has signed off on everything and is ready to fund. Usually, you close 2 to 3 days after getting this status, and move-in happens immediately after signing and recording.

Title insurance protects you and the lender against any future claims or "liens" against the property that weren't discovered during the initial title search. For example, if someone forgot to probate a will, and the property that is sold to you did not really belong to the sellers who sold it to you, then the title insurance will help with this issue.

Lenders often sell the "servicing rights" to another company. This means you might send your payments to a different company than the one that originated your loan. This is normal and won't change your loan terms.

By paying half your monthly mortgage every two weeks, you end up making 13 full payments a year instead of 12. This can shave years off your loan and save thousands in interest.

Yes! You can shop for a better rate at any time. If you have an escrow account, just make sure your lender is notified so they can pay the new company correctly.

Most lenders offer a 15-day grace period. After that, a late fee is charged. If you fall 30 days behind, it is reported to the credit bureaus. If you’re struggling, contact your lender immediately to discuss "forbearance" options.

In this situation, your credit would reflect what is called "rolling lates." Until you make up the payment you missed, you would forevermore be considered 30 days late for every single month until that missing month is repaid. This is VERY damaging to your credit when this happens.

Reserves are the "liquid assets" (cash in the bank or in investments that can easily be liquidated) you have left over after paying your down payment and closing costs. Lenders like to see 2–6 months of payments in reserves as a safety net.

A realtor navigates the legal contracts, negotiates the best price, manages inspections, and acts as your project manager from start to finish. Your realtor is in your corner fighting for you!

A general rule is to refinance if you can lower your rate by at least 0.75% to 1%. However, it also depends on how long you plan to stay in the home to recoup the closing costs.

A HELOC works like a credit card backed by your home’s equity. You can borrow as needed, pay it back, and borrow again during the "draw period."