Mortgage FAQ
As a potential home buyer, you have an exciting journey ahead. We know applying for a mortgage loan and navigating the complex housing market can be daunting. At PurposeBank, we want your home purchase to be a rewarding experience and we're here to help in any way we can! Get answers to common home-buying questions below:
How much house can I afford?
It's not uncommon to "qualify" for more mortgage than you may comfortably be able to afford -- so it pays to borrow cautiously. Here's some simple advice with links to easy-to-use mortgage calculators that will help you determine how much you can afford.
Is buying better than renting?
There's a right time to rent and a right time to buy. Find out whether you're ready for the journey to homeownership and your first mortgage with this simple calculation.
What's the difference between prequalification and pre-approval?
Both prequalification and pre-approval show you're a serious buyer -- one gets you started and the other makes it official. It's important to understand when to do which.
FHA or conventional mortgage?
While there are many mortgages to consider, government backed FHA and conventional mortgages are very popular choices.
What should my down payment be on a new house?
A down payment demonstrates your commitment and a larger down payment could help you secure a better interest rate -- which means you'll have lower monthly mortgage payments.
What is an Escrow Account?
An escrow account may be set up by your lender to place part of your monthly payment into the account for some of the costs associated with home ownership.
What are the different types of mortgage loans?
Fixed-rate loans, ARMs, FHA loans, VA loans, Jumbo loans -- the list may seem long, but it may be in your best interest to become a knowledgeable first-time home buyer and understand your loan options.
What are mortgage points?
Some home buyers get lower payments by paying a percentage of the interest up front. This option, called "buying points," can lower your interest rate and monthly payments -- but it may not be right for everyone.
What is mortgage APR?
The Annual Percentage Rate helps you compare payments and total cost between mortgage offers -- it's just one of the many factors to consider when shopping for a mortgage loan.
How does my credit score affect my mortgage rate?
Good payment habits and a good credit score can mean a lower mortgage rate -- and if your credit score isn't what you want it to be, you can improve it over time.
What documents are part of the mortgage process?
Now is the time to get organized. As a home buyer you'll be required to prove things like how much you earn, where you've lived, monthly debts and account balances. Take a look at our mortgage checklist for additional items you may need.
What happens at a mortgage closing?
"Closing" is the last step in the home-buying process. It's where all the parties get together to finalize the transaction by exchanging signatures, checks -- and ultimately, house keys.
When can I refinance my mortgage?
Contact a PurposeBank Mortgage Officer to discuss your goals and compare all of the refinancing options that are available to determine what loan products may best suit your needs.
