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25 Mortgage Questions Every Homebuyer Should Know

Updated: Aug 7


Looking for a specific mortgage question?


Use this Quick Navigation below to jump directly to the answer, bookmark this page, I update it regularly as lending guidelines change and new questions are added.

For nearly three decades, I've helped homebuyers, homeowners, investors, physicians, business owners, and real estate professionals navigate every stage of the mortgage process. My experience ranges from $10,000 personal loans to $17.5 million commercial financing, giving me the perspective to match borrowers with the right loan—not just the most common one. I believe education is just as important as financing, which is why I created this resource to answer the questions I hear most often.

By Jacqueline O'Shaughnessy, Loan Officer / Private Capital, NMLS #382900 — South Wind Financial, Inc, NMLS #9462 — Las Vegas, NV


Quick Navigation


Buying a Home


Loan Programs


Refinancing


Credit & Money

  • What affects my mortgage interest rate?

  • Should I buy mortgage discount points?

  • What closing costs should I expect?

  • Can I buy a home with student loans?

  • How can I improve my credit score before buying?


Investing

  • Can I buy an investment property?

  • What loan options are available for real estate investors?


Special Programs

  • What is Down Payment Assistance (DPA)?

  • What if I'm self-employed or have non-traditional income?

  • What is private money lending?

  • How do I choose the right mortgage loan?




Weekly Mortgage Rates (Freddie Mac)

Understanding current mortgage rate trends can help you make more informed decisions about buying a home or refinancing. Freddie Mac publishes its Primary Mortgage Market Survey® each week, providing a snapshot of average mortgage rates across the United States. While your individual rate will depend on factors such as your credit profile, loan program, down payment, and property type, this is an excellent resource for tracking market trends.



walking through the steps of the home buying process with Jacqueline O'Shaughnessy

What Happens During the Mortgage Process?

Short Answer

Buying a home can feel overwhelming, especially if it's your first time. The good news is that the mortgage process follows a predictable series of steps. Knowing what to expect can help reduce stress and keep your transaction moving smoothly.

The Mortgage Process

  • Get Pre-Approved – Review your finances and determine your budget.

  • Find Your Home – Work with your real estate agent and make an offer.

  • Loan Application – Complete your mortgage application and submit your documentation.

  • Processing & Underwriting – Your lender verifies your information and reviews your loan for final approval.

  • Home Appraisal – An independent appraiser confirms the home's market value.

  • Final Approval – Any remaining conditions are completed and your loan is cleared to close.

  • Closing Day – Sign your loan documents, receive your keys, and become a homeowner.

Helpful Resources




What Credit Score Do I Need to Buy a Home?

Short Answer

One of the biggest misconceptions I hear is that you need perfect credit to buy a home. The truth is, different mortgage programs have different minimum credit score requirements, and your credit score is only one part of the approval process. Lenders also consider your income, employment history, down payment, assets, and overall financial picture.

A higher credit score may help you qualify for more loan options or a better interest rate, but many buyers are surprised to learn they qualify sooner than they expected. Rather than guessing whether your score is high enough, I recommend reviewing your options before spending months trying to improve your credit. In many cases, there may already be a loan program that fits your situation.

Helpful Resources:



How Much Down Payment Do I Need?

Short Answer

One of the biggest myths about buying a home is that you need a 20% down payment. While putting 20% down can help you avoid private mortgage insurance (PMI) on some loan programs, most buyers qualify with much less. The amount you'll need depends on the type of mortgage, your financial profile, and the loan program you choose.

There are loan programs available with 3%, 3.5%, 5% down payment requirements There are downpayment assistant programs, sellers are paying towards closing costs, and gifts from family to name a few options. Before delaying your home purchase to save a larger down payment, it's worth reviewing your options. You may already have enough saved to become a homeowner.

Common Down Payment Options

  • Conventional Loans: As little as 3% down for qualified buyers.

  • FHA Loans: 3.5% down with qualifying credit.

  • VA Loans: 0% down for eligible veterans and active-duty service members.

  • USDA Loans: 0% down in eligible rural areas.

  • Jumbo Loans: Down payment requirements vary by program.

Other Ways to Reduce Your Upfront Costs

  • Down Payment Assistance (DPA) programs

  • Seller-paid closing costs (when negotiated)

  • Gift funds from eligible family members

  • Employer assistance programs (when available)


Helpful Resources




how much mortgage loan can I afford, home with checklist

How Much House Can I Afford?

Short Answer

The amount you qualify to borrow and the amount you feel comfortable spending are often two different numbers. While lenders evaluate your income, monthly debts, credit history, down payment, and assets to determine how much you may qualify for, I encourage my clients to choose a monthly payment that fits comfortably within their lifestyle and long-term financial goals.

Before you begin shopping for a home, getting pre-approved can give you a realistic price range and help you understand your purchasing power. It also strengthens your offer when you're ready to buy. Rather than guessing what you can afford, let's review your numbers together and build a plan that works for your budget.

Helpful Resources



should I get pre-qualified for a mortgage loan, house and downloadable checklist

Should I Get Pre-Approved Before Looking at Homes?

Short Answer

Buying a home is exciting, but for many people, meeting with a lender for the first time can feel intimidating. The good news is that getting pre-approved is simply the first step in understanding your budget and your financing options—there's no pressure or obligation.

During our first conversation, I'll ask a few questions about your employment, income, assets, debts, and homeownership goals. From there, I'll explain your loan options and help you understand what you can comfortably afford.

To get started, I'll typically need:

  • Your employment information - last 2 paystubs

  • Your income - last 2 years W2, Taxes & 1099's

  • Your available assets - 401k, Retirement plan, IRA

  • Your monthly debts - Can be added when we pull your credit

  • An estimate of your down payment - Last 2 bank statements


Most real estate agents will ask for a pre-approval before showing homes, and sellers often view pre-approved buyers as stronger offers. When you work with me, I don't stop at a pre-approval letter. Once your application and documentation are complete, I can often submit your file through underwriting for an initial approval before you're under contract. This additional review can help identify potential issues early, giving you greater confidence when it's time to make an offer.


Helpful Resources



Understanding Your Mortgage Options

Not all mortgage loans are the same. Choosing the right loan depends on your financial goals, credit profile, down payment, and the type of home you're purchasing. Understanding your options before you begin shopping can help you make a more confident financial decision.

Every mortgage has three basic components:

  • Loan Type – Conventional, FHA, VA, USDA, Jumbo, and other specialized loan programs.

  • Loan Term – How long you'll repay the loan, such as a 15-year or 30-year mortgage.

  • Interest Rate Type – Whether your interest rate remains fixed for the life of the loan or may adjust over time.



What Is a Conventional Loan?

Short Answer

A conventional loan is the most common type of mortgage and is not insured or guaranteed by the federal government. It's a popular choice for homebuyers with stable income and good credit because it offers flexible loan terms, competitive interest rates, and a variety of down payment options.

Many qualified buyers can purchase a home with as little as 3% down, although putting 20% down may allow you to avoid private mortgage insurance (PMI). Conventional loans can be used to purchase a primary residence, second home, or investment property, depending on the program and your qualifications.

Helpful Resources



What Is an FHA Loan?

Short Answer

An FHA loan is a government-insured mortgage designed to make homeownership more accessible, especially for first-time homebuyers and buyers with limited savings. FHA loans typically require a lower down payment than many conventional loans and may offer more flexible credit guidelines for qualified borrowers.

Many buyers qualify with as little as 3.5% down, making FHA loans a popular option for those who don't have a large down payment. Because FHA loans are insured by the Federal Housing Administration, they require mortgage insurance, but they can be an excellent choice for buyers who are ready to own a home sooner rather than waiting years to save a larger down payment.

Helpful Resources



What Is a VA Loan?

Short Answer

A VA loan is a mortgage benefit available to eligible veterans, active-duty service members, and certain surviving spouses. Backed by the U.S. Department of Veterans Affairs, VA loans are designed to make homeownership more affordable by offering competitive financing options.

One of the biggest advantages of a VA loan is that many eligible borrowers can purchase a home with no down payment. VA loans also do not require private mortgage insurance (PMI), helping many buyers reduce their monthly housing costs. If you've served our country, a VA loan may be one of the most valuable home financing benefits available to you.

Helpful Resources



What Is a Jumbo (Luxury) Loan?

Short Answer

A jumbo loan is a mortgage that exceeds the conforming loan limit established each year by the Federal Housing Finance Agency (FHFA). For 2026, the conforming loan limit for a one-unit property in most counties is $832,750. If your loan amount is above your county's conforming limit, you'll typically need a jumbo loan. Some high-cost areas have higher conforming loan limits.

Jumbo loans are commonly used to finance luxury homes, but they're not limited to high-end properties. In many real estate markets, rising home values mean buyers may need jumbo financing simply because the purchase price exceeds the conforming loan limit. Qualified borrowers can benefit from competitive financing options, but jumbo loans generally require strong credit, stable income, and sufficient assets.

Helpful Resources




A Doctor buying a home with programs meant for Medical professionals. Doctors & Nurses

What Is a Doctor or Nurse Home Loan?

Short Answer

Doctor and Nurse Home Loans are specialized mortgage programs designed for eligible healthcare professionals. These programs recognize the unique financial challenges many medical professionals face, such as student loan debt, residency, or entering a high-income career, and may offer more flexible qualifying guidelines than traditional mortgage programs.

Depending on the program and your qualifications, benefits may include low or NO down payment options, NO private mortgage insurance (PMI), flexible treatment of student loan debt, and financing for higher loan amounts. Eligible professions may include physicians, dentists, pharmacists, veterinarians, nurse practitioners, physician assistants, registered nurses, CRNAs, and other qualified healthcare professionals.

Helpful Resources




should I refinance my home to pay off debt? woman running the numbers

When Does it Make Sense to Refinance my Home Loan?

Short Answer

Refinancing allows you to replace your current mortgage with a new loan that better fits your financial goals. While many

homeowners refinance to obtain a lower interest rate; that's only one reason to refinance. You may also choose:

  • to shorten your loan term

  • lower your monthly payment

  • remove mortgage insurance

  • access your home's equity for a pool, remodel, or investment

  • consolidate higher-interest debt to lower your overall monthly payments


Helpful Resources



HELOC vs. Cash-Out Refinance: Which Is Better?

Short Answer

A Home Equity Line of Credit (HELOC) and a cash-out refinance both allow you to access the equity in your home, but they work very differently.

  • A HELOC is a revolving line of credit that works similarly to a credit card, you borrow only what you need, when you need it. This is a second mortgage; your first mortgage remains the same.

  • A cash-out refinance replaces your existing mortgage with a new loan for a higher loan amount, allowing you to receive the difference in cash.

The best option depends on your goals. If you have a low interest rate on your current mortgage, a HELOC may allow you to keep that loan while accessing your equity. If interest rates and your financial situation make sense, a cash-out refinance may simplify your finances by combining everything into one monthly payment. Before choosing either option, it's important to compare the long-term costs and benefits.

Helpful Resources

1 Comment

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Nora
Jul 31
Rated 5 out of 5 stars.

Jackie was extremely helpful… i had to sell my house during divorce and had a million questions. She was patient, very knowledgeable and extremely kind. I’m grateful I had someone to help me navigate during a really hard time.

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