Frequently Asked Questions
Mortgage Questions.
Mortgage Questions.
Real Answers.
No fluff. No runaround. The questions I get asked every week — answered the way I'd answer them on a phone call.
Getting Started
Before You Buy
Should I call a lender or a realtor first?
Always the lender first. The lender controls the money. Knowing exactly what you qualify for — and which program fits your situation — before you start shopping means you never fall in love with a home you can't close on. Call me first. It's free and soft pull only.
Will applying hurt my credit score?
No. My application uses a soft pull only — it will not impact your credit score in any way. You'll know exactly where you stand with zero risk to your credit.
How much do I need to put down?
It depends on the program. VA and USDA require zero down. FHA requires 3.5% with 580+ credit. HomeReady and Home One conventional start at 3%. Conventional standard starts at 5%. You do not need 20% down to buy a home.
What credit score do I need to buy a home?
It depends on the program. FHA allows as low as 500 with 10% down and 580 with 3.5% down. VA has no minimum score requirement though most lenders want 580+. Conventional starts at 620. USDA typically requires 640+. If your score is below where it needs to be I have a credit restoration specialist who can help.
How long does it take to get pre-approved?
Same day in most cases. Apply online with a soft pull and I'll review your file and reach out personally. If you need a full pre-approval letter for an offer we can typically turn that around within 24 hours of receiving your documents.
I was told I don't qualify. Should I still reach out?
Yes. A denial from one lender is not a final answer. I work commission earners, credit rebuilders, high DTI files, VA refers, and complex income situations that most lenders turn away. Let me look at the actual file before you give up.
VA Loans
Veterans & Military
Can I use my VA benefit more than once?
Yes. Your VA benefit is reusable for life. In most cases you can use it again even if you currently have an existing VA loan — as long as you have remaining entitlement. I'll check your Certificate of Eligibility when you apply.
Do I have to pay a VA funding fee?
Most veterans do pay a funding fee — it can be rolled into the loan. However veterans with a service-connected disability rating of 80% or higher are completely exempt. Always worth checking before closing.
What if my VA loan was denied or referred elsewhere?
An AUS refer is not a denial. Manual underwrites are available for VA and I know how to build one correctly. If another lender turned your file away let me look at it before you walk away from your benefit.
Is there a maximum VA loan amount?
Veterans with full entitlement have no maximum loan amount with zero down — VA removed loan limits in 2020. Reduced entitlement situations may require a down payment above a certain amount. I'll calculate this for your specific situation.
FHA & 203K
FHA & Renovation Loans
What is an FHA 203K loan?
The FHA 203K Limited loan lets you buy a home and finance up to $75,000 in non-structural repairs in a single mortgage — one loan, one closing, one payment. I closed one myself in 53 days on commission income with a 51% DTI.
Can I use FHA after bankruptcy?
Yes. FHA requires 2 years after a Chapter 7 discharge and 1 year into a Chapter 13 repayment plan with trustee approval. If you're at or past these timelines let's look at your file.
Does FHA mortgage insurance ever go away?
On most FHA loans taken after 2013 with less than 10% down — no. FHA MIP stays for the life of the loan. This is one reason conventional is often better for buyers with 680+ credit and 5%+ down. I'll run both scenarios on every file.
What's the difference between FHA Limited and FHA Standard 203K?
FHA 203K Limited is capped at $75,000 in repairs and covers non-structural work only — kitchens, baths, roofs, HVAC, flooring. The Standard 203K has no repair cap and allows structural work but requires a HUD consultant throughout. Most buyers use the Limited.
USDA & Conventional
USDA & Conventional
How do I know if my property qualifies for USDA?
USDA eligibility is based on property location and household income. Send me the address and I'll check immediately — no obligation, no credit pull. More suburban areas qualify than most buyers realize.
How does conventional compare to FHA?
With 680+ credit and 5%+ down conventional often beats FHA on total monthly cost — especially since conventional PMI cancels when you hit 20% equity and FHA MIP doesn't. I run both scenarios on every file so you can choose with real numbers.
When does PMI go away on a conventional loan?
PMI automatically cancels at 78% LTV based on your original purchase price and payment schedule. You can request removal at 80% LTV — and if your home has appreciated you can request a new appraisal to demonstrate higher equity.
The Process
How It All Works
How long does it take to close?
My average close time is 28 days. Standard conventional and FHA purchases close in 21–30 days with organized buyers. VA loans typically run 28–35 days. 203K can take 45–60 days depending on the renovation scope.
What documents do I need to apply?
For a standard application: last 2 years W-2s or tax returns, last 2 pay stubs, last 2 months bank statements, and a copy of your ID. Self-employed buyers need 2 years tax returns and year-to-date P&L. I'll give you a complete list specific to your situation after the initial call.
What's the difference between pre-qualification and pre-approval?
Pre-qualification is a quick estimate based on what you tell me — no documents, no credit pull. Pre-approval is a full review of your income, credit, and assets with a commitment letter that sellers take seriously. In competitive markets you need a pre-approval — not just a pre-qual.
Can I buy and sell a home at the same time?
Yes — it requires coordination and the right loan structure. We need to look at whether you're carrying two mortgages temporarily, whether a bridge loan makes sense, or whether the sale of your current home needs to fund the down payment on the new one. Call me so we can map it out.
What are closing costs and how much do they run?
Closing costs typically run 2–5% of the loan amount and include lender fees, title fees, prepaid interest, insurance, and taxes. Seller concessions can cover some or all of these — up to 6% on FHA and USDA, 3–9% on conventional depending on down payment. I'll give you a real Loan Estimate after you apply.
Credit & Income
Credit Score & Income Questions
Can I qualify with commission or self-employed income?
Yes. I closed my own mortgage on commission income with just over one year in my role. Commission income, 1099 income, and self-employment income all qualify — with the right documentation. Two years of tax returns showing the income is the standard requirement.
What is DTI and how does it affect my approval?
Debt-to-income ratio is your total monthly debt payments divided by your gross monthly income. FHA allows up to 50%+ DTI with compensating factors. VA focuses on residual income rather than a hard DTI cap. Conventional typically caps at 45–50%. I closed my own 203K at 51% DTI — high DTI files are not automatically dead.
How fast can I improve my credit score?
I typically get clients where they need to be in about 3 weeks with targeted rapid rescore strategies. My credit restoration specialist Natasha Stewart works with clients who need more time — usually 30–90 days for more significant rebuilds. We build the plan and close when you're ready.
Do collections have to be paid off before closing?
Not always. FHA does not require medical collections to be paid. Non-medical collections under $2,000 cumulative may not need to be paid depending on the AUS finding. VA is very flexible on collections. The answer depends on your specific file — let me look at it.
James Hair
Senior Loan Originator · First Option Mortgage · NMLS #1680348
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