Mortgage FAQs: Part 2

February 11, 2019 By ,

FAQs About Mortgages

Last week, we published a list of answers to our most Frequently Asked Questions about mortgages. Well, we’ve been in the business for a long time, so we have five more mortgage FAQs we think will help you through the home-buying journey. Here is part 2 of a multi-part series with some of the most commonly asked questions we get about mortgages.

How Do I Know How Much Home I Qualify for?

  • For a quick estimate, you can use our online mortgage calculator to figure out what purchase price and down payment would fit your monthly budgeted mortgage payment amount.
    • For a more detailed figure, you can contact us or apply online to allow your mortgage banker to run your credit report and verify your assets and income. Once that’s completed, your mortgage banker can also help you obtain a complete written preapproval before you make an offer on a house. There is a difference between being pre-qualified and pre-approved.

What Should I Avoid Doing Before I get Pre-Approved?

  • Don’t go shopping for a new home until you’ve been pre-approved.
    • Obtaining a pre-approval before you begin the shopping process can save you hours of stress and heartache. When you know in advance how much house you can afford, you can meet with your realtor as a well-informed and educated buyer, ready to make a solid offer. In the eyes of a seller, a pre-approved homebuyer also appears to be more motivated.
  • Don’t box up all your important documents, such as tax returns, bank statements, pay stubs, and W2s.
    • Maintaining easy access to your pay stubs, bank statements, tax returns, and W2s will speed up your prequalification process. We also suggest keeping documentation for any large deposits you make into your bank account and letting your mortgage banker know ahead of time if you plan on using a gift toward your down payment.

What Should I Avoid Doing During the Pre-Approval and Home Loan Process?

  • Pre-approvals can be quick and easy, so it’s important to remember that any major changes in your finances or credit could delay your loan closing or even impact your loan approval status.
  • Don’t:
    • Suddenly pay off all your debts.
    • Apply for a new credit card, auto loan, or other types of credit.
    • Co-sign a loan with someone.
    • Change jobs, switch to self-employment, or quit your job.
    • Skip payments on your credit cards, utilities, or loans.
    • Charge up the balance on your existing credit.
  • If you think you absolutely must do one of these “don’ts,” talk to your mortgage banker before you take action—it’s their job to help you figure out what to do so that your mortgage loan is minimally affected.

Can I Still Qualify Even if I Have Bad Credit or Have Filed Bankruptcy?

  • Having good credit can help get a more competitive mortgage interest rate and open up a wider variety of loan program options to you, but perfect credit is not a requirement for qualifying for a mortgage.
    • If you have a low credit score or have filed bankruptcy in the past, you still have loan options.
    • Your mortgage banker can help you look into available options that might help improve your credit.
    • Your loan will be based off the official credit report pulled by your lender, but you can check your free credit report yearly to keep track of your financial status. This can be especially useful if you’re planning to buy a house. Annual credit checks can help you catch any problems that arise early on, such as mistakes on your credit report, or fraudulent accounts.

What Happens if I Start a New Job?

  • Most loan programs require a two-year history of employment, preferably in the same field.
    • A job change to a better or higher-paid position can be seen as favorable.
    • Recent college grads may still be able to qualify without a two-year history of employment, as the college coursework can count in lieu of traditional employment.
    • Employment changes from hourly/salary to commission, W2 to self-employed, etc. typically cause more challenges in mortgage qualification, so be sure to discuss these types of employment changes with your mortgage banker prior to officially making the change whenever possible.


Did you miss Mortgage FAQs: Part 1? You can revisit it here.

Feel free to contact us anytime, or just fill out the form below for answers to your mortgage questions.

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