Frequently Asked Questions
Everything you need to know about getting a mortgage.
Generally, you need a minimum credit score of 620 for a conventional loan. However, FHA loans allow scores as low as 580 with a 3.5% down payment, and VA loans technically have no minimum score requirement set by the government (though lenders often look for 620).
While 20% is ideal to avoid Private Mortgage Insurance (PMI), it's not required. Conventional loans can require as little as 3% down. FHA loans require 3.5%. VA and USDA loans offer 0% down options for eligible borrowers.
Private Mortgage Insurance (PMI) is a monthly fee you pay if you put less than 20% down on a conventional loan. It protects the lender in case you default. It typically drops off once you reach 20% equity.
The interest rate is the cost of borrowing the principal loan amount. The APR (Annual Percentage Rate) is broader; it includes the interest rate plus broker fees, discount points, and some closing costs, expressed as a yearly rate.
A 30-year mortgage offers lower monthly payments but costs more in long-term interest. A 15-year mortgage has higher monthly payments but saves tens of thousands in interest and builds equity twice as fast.
Locking a rate guarantees your interest rate for a specific period (usually 30 to 60 days) while your loan is processed. This protects you if market rates go up before you close.
On average, the process takes 30 to 45 days from application to closing. However, pre-approval can happen in just a few days or even hours.
Closing costs are fees paid to finalize your mortgage. They typically range from 2% to 5% of the loan amount and include appraisal fees, title insurance, origination fees, and taxes.
Checking rates through LocalQuote.com uses a 'soft pull' which does not impact your credit score. A 'hard pull' is only done later when you officially apply with a specific lender.
An escrow account is managed by your lender. A portion of your monthly mortgage payment goes into this account to pay your property taxes and homeowners insurance premiums when they are due.