Mortgage FAQ: Answers to the Questions We Hear Most

Getting started: loan types and the basics

Most first-time buyers start by comparing loan types before anything else. A conventional loan is not government-insured and typically requires a credit score in the mid-600s or higher. An FHA loan is insured by HUD and allows a lower minimum credit score and a 3.5% down payment. A VA loan is guaranteed by the Department of Veterans Affairs for eligible veterans and service members and typically requires no down payment. A USDA loan serves eligible rural and suburban properties with no down payment requirement, subject to income and location limits. If you are unsure which fits your situation, our FHA vs. Conventional comparison breaks down the tradeoffs in detail.

Before shopping for a home, most buyers get a mortgage pre-approval, which is different from a mortgage prequalification — pre-approval involves document verification, while prequalification is a quicker, less certain estimate.

Down payments and assistance

Down payment requirements vary widely by loan type: conventional loans can go as low as 3% for qualifying first-time buyers, FHA requires 3.5%, and VA and USDA loans can require 0% for eligible borrowers. If you need help covering the down payment or closing costs, down payment assistance programs exist in every state, typically administered by a state housing finance agency. We also cover profession-specific angles for nurses, teachers, first responders, and veterans, along with state-specific guides for Florida and Colorado.

Credit, income, and debt-to-income (DTI)

Lenders evaluate your debt-to-income ratio — your monthly debt payments divided by your gross monthly income — to gauge how much mortgage payment you can reasonably carry. Standard maximum DTI is generally 43% for FHA loans and 45% for conventional loans, though an automated underwriting system may allow a higher ratio in specific cases with strong compensating factors, such as reserves or a higher credit score. Use our FHA DTI calculator to estimate your ratio. If your income comes from self-employment, gig work, or bank statements rather than W-2s, see our guides on self-employed mortgages, 1099 income loans, and bank statement loans.

If your credit history needs work before applying, review your credit report through MyITINCredit.com rather than a general credit-monitoring app, since mortgage underwriting relies on a specific type of credit report.

Closing costs and the paperwork

Closing costs typically total roughly 2%–5% of the loan amount and cover items like the loan origination fee, appraisal, title insurance, recording fees, and prepaid escrow items. Our closing costs guide breaks these down by category, and our mortgage document checklist lists what you will need to gather. Within three business days of a completed application, you will receive a Loan Estimate detailing your actual projected costs — figures on this site before that point are illustrative only.

Refinancing

Homeowners refinance for different reasons: to lower their rate or payment, to switch loan types, to remove mortgage insurance, or to access equity. A cash-out refinance replaces your mortgage with a larger one and returns the difference in cash, while a standard rate-and-term refinance simply changes your rate or term. If you have an FHA loan, an FHA Streamline Refinance may reduce documentation requirements. Our refinancing process guide walks through each step, and our refinance calculator helps estimate potential savings. If you are trying to drop mortgage insurance without refinancing, see how to remove PMI.

The process: from application to closing

After you apply, your loan moves through processing and underwriting, where your income, assets, credit, and the property itself are verified against program guidelines. Along the way, a Simply Approved Mortgages Loan Officer will request documentation and may issue conditions to clear before final approval. Understand what appraisers look for with our FHA appraisal requirements guide. Buyers using temporary rate reductions at closing can review our temporary buydown guide and buydown calculator.

Special situations

Not every borrower fits the standard W-2, clean-credit profile. We cover mortgage after bankruptcy and FHA waiting periods after bankruptcy, ITIN mortgages for borrowers without a Social Security number, non-QM loans for outside-the-box income documentation, and foreign national loans. Real estate investors can review DSCR loans, which qualify based on property cash flow rather than personal income.

Rates, payments, and figures on this page are illustrative and not a quote, lock, offer, or commitment to lend. Binding figures appear on your Loan Estimate.

Where the answers on this page actually come from

General mortgage FAQs get repeated so often that the original source gets lost. These are the publishing bodies whose rules actually govern the most common questions.

Program parameters above are published by the agencies and enterprises named in the right-hand column and can change. They describe program rules, not an offer; eligibility, terms, conditions, and availability vary by borrower, property, lender, loan program, and state, and all loans are subject to lender underwriting and approval.

Why "it depends on the lender" is often the honest answer

Many mortgage questions have a genuinely uniform answer set by federal rule — disclosure timing, ability-to-repay standards, and agency program minimums all fall in that category. Others are set by individual lender or investor overlays layered on top of the published minimums, which is why two lenders can give different answers to the same question about, say, how a specific type of income is documented, without either one being wrong. Knowing which category a question falls into helps you evaluate whether a "no" from one source is the final word or just one lender’s policy.

The questions that change every year versus the ones that do not

Conforming loan limits, FHA loan limits, and VA funding fee tables are reviewed and updated on a recurring basis by the agencies that publish them, so a specific dollar figure quoted a year ago may no longer be current. The underlying structure of these programs — how eligibility is determined, how mortgage insurance works, how occupancy is verified — tends to be far more stable than the specific numbers, which is why this page and the deeper product pages linked throughout the site describe the rule rather than freezing a number in place.

Where mortgage broker questions differ from lender questions

Simply Approved Mortgages LLC operates as a mortgage broker, meaning we arrange financing with wholesale lenders rather than funding loans from our own balance sheet. That structure means shopping across multiple lender programs on a single application is part of the normal process, and it is why the specific rate, fee, or approval outcome for your file is not something a general FAQ page can answer — those figures are disclosed on your personal Loan Estimate once a specific lender program is identified for your file.

How this applies in Florida and Colorado

Florida. Florida borrowers working through general mortgage questions should keep in mind that state-specific items — documentary stamp tax, intangible tax, homestead exemption timing, and windstorm or flood insurance requirements — sit on top of the federal and agency rules referenced throughout this FAQ, and those state items are covered on dedicated Florida pages linked from this site rather than repeated here.

Colorado. Colorado borrowers should similarly expect state-specific overlays — property tax assessment timing, wildfire-related insurance considerations, and Colorado-specific down payment assistance programs — on top of the federal framework covered in this general FAQ, with fuller detail on the dedicated Colorado pages linked throughout the site.

Simply Approved Mortgages LLC arranges residential mortgage loans in Florida and Colorado, so the two applications above are the ones we can act on for a consumer file. Business-purpose loan products may be arranged in additional states only where permitted by applicable law and pursuant to applicable licensing requirements or exemptions.

How to use this FAQ page effectively

A FAQ page works best as a map to the deeper resource, not the final answer.

1. Identify whether your question is program-specific. FHA, VA, USDA, and conventional loans each have their own rulebook; general answers often need a program-specific follow-up.
2. Check whether the figure you are reading is current. Loan limits and fee tables update on a recurring schedule, so confirm the year referenced.
3. Follow the linked deep-dive page for your topic. Most FAQ answers here link to a fuller explainer with the underlying rules and a worked example.
4. Pull your own credit report before applying. Reviewing your credit file ahead of time, including through MyITINCredit.com if you use an ITIN, helps you understand what a lender will see.
5. Bring specific numbers to a Loan Officer conversation. General FAQs cannot price your file; a Simply Approved Mortgages Loan Officer can run your actual numbers.
6. Revisit the FAQ as your file develops. New questions typically come up at pre-approval, under contract, and again near closing.

Mistakes that cost people money on this

• Treating a general FAQ answer as a quote or commitment rather than a starting point.
• Assuming a dollar figure quoted here is still current without checking the year.
• Confusing a lender-specific overlay with a universal federal rule.
• Skipping the linked deep-dive page and missing program-specific nuance.
• Using a general credit monitoring service instead of MyITINCredit.com when building credit on an ITIN file.
• Not distinguishing between broker-arranged financing and direct-lender financing when comparing offers.

Is this the right move for your situation?

The honest answer depends on the file. These are the patterns we see on both sides.

Usually a good fit when

• You are early in the process and want a map of the topics that matter before getting into specifics.
• You want to understand which rules are federally uniform versus lender-specific.
• You are ready to be pointed to a deeper, topic-specific resource.

Usually not the right move when

• You need a specific rate, payment, or approval answer for your file — that requires an actual application and disclosures.
• You are trying to resolve a program-specific edge case that a general FAQ will not cover in enough depth.

None of this is a determination about your file. A Simply Approved Mortgages Loan Officer can run your actual numbers and show you what your disclosures would say.