A mortgage is a type of loan used to buy a property or plot of land. The property or plot in question serves as collateral for the loan. Learn more about different types of mortgages and how to get one here.

Mortgages and home loans are similar, but they aren’t quite the same thing. A mortgage is a loan used to buy property, where the property serves as collateral against default on the loan. A home loan, on the other hand, is any loan used to buy a house – the property does not necessarily serve as collateral. Learn more about the difference here.

While it’s often recommended to have a credit score of 620 or above when applying for a mortgage, it is certainly possible to obtain a home loan with a lower score. If you are still building your credit or recovering from bruised credit, contact your local mortgage broker. They will work with you to find a mortgage product that meets your needs at the lowest possible interest rate

Mortgage rates fluctuate on a daily basis, so what makes a “good rate” is highly variable. Interest rates are also dependent on the type of mortgage you take out, as lower rates are typically extended for shorter payoff periods. In other words, a 30-year mortgage will have a higher interest rate than a 15-year mortgage. 

As of Summer 2022, the average mortgage rate for a fixed rate 30-year mortgage is around 5.78%, while the interest rate for a fixed rate 15-year mortgage is almost a full percentage point lower, at 4.95%. 

Understanding your interest rate is crucial when applying for a mortgage. Use our Rate Calculator to estimate your monthly mortgage costs and begin planning to buy the home of your dreams.

A mortgage broker is a mortgage professional who specializes in finding the best possible loan for their specific situation. They work closely with both borrowers and lenders to negotiate deals and ensure the best possible rates on a mortgage, even in cases where a borrower’s financial status or particular logistical needs would seem prohibitive. Learn more about what brokers do here.

Mortgage brokers are independent professionals – they don’t serve the interests of massive commercial banks. They make their money by building a base of satisfied clients and leveraging a reputation of trustworthiness and customer service – bankers make their money by plowing through as many loans as possible. To learn more about the many ways that brokers are different from bankers, including licensing and education requirements, pay structure, and transparency, click here.

Mortgage brokers are highly trained, specialized loan experts. Their sole concern is enabling their clients to achieve the dream of home ownership in a way that is affordable, accessible, and transparent. Learn more about how brokers make the mortgage process painless here.

Buying a home is a long process, but it can be broken down into easily manageable steps. These include budgeting, shopping, preapproval, approval, financing, and closing. Learn more about these steps here.

The Consumer Financial Protection Bureau CFPB is a federally-created agency that is designed to enable consumers to have fair access to financial services and tools . The CFPB ensures that lenders are providing fair and transparent access to their products, and also works to promote widespread mortgage education.

There are many different types of mortgage, each with their own advantages, disadvantages, and specific requirements. For example, there are Fixed Rate Mortgages, Adjustable Rate Mortgages, USDA Mortgages, VA Mortgages, Reverse Mortgages, FHA Mortgages, Jumbo Mortgages, and more. Working with a mortgage broker is a great way to determine what kind of mortgage suits your situation best.

While 20% is a traditional down payment for a home, it is not always necessary to meet this requirement. It is certainly possible to put down a smaller payment, though this will raise your Loan-to-Value ratio. A higher Loan-to-Value ratio may affect the approval process, and will likely require you to pay for Private Mortgage Insurance. Working with a broker will enable you to access loan options that make sense for your situation even if you are unable or unwilling to put 20% down up front.

While they sound quite similar, mortgage pre-approval and mortgage pre-qualification are two distinct steps of the homebuying process. Essentially, pre-qualification is when the lender reviews your basic financial information and establishes whether or not you qualify for a loan at all. Preapproval is the second, more involved step that follows. During pre-approval, the lender will need to see a wider range of financial and personal information to determine the rough amount that they are willing to lend you. Both are necessary to receive a mortgage.

Whether you should rent or buy your home depends heavily on a number of factors. While renting a home can seem less expensive, it is often not as cost effective in the long run as buying a home of your own. 

It’s important to determine whether or not you can afford a house – something that can be determined with tools like our rate calculator or by talking to a mortgage broker. If you find a house that works with your budget, however, you will be investing in a significant asset that will provide significant value over time.

Building healthy credit is important for anyone who is interested in homeownership. Pulling your credit score is one of the first things a lender will do when determining the amount you qualify for and what your rate will be. 

When you’re working towards building up your score, here are some things to remember. 

• Create a budget plan, and stick to it. This will prevent excessive spending that may require you to take on debt. 
• Never spend more than you can afford to pay off immediately. When you put a purchase on your credit card, ensure you have enough “cash on hand” to pay that purchase off right away. This will gradually build your credit over time as lenders establish that you are punctual with your payments. 
• Set up automatic payments where possible. Forgetting to pay a bill or charge can impact your credit score, even if you are capable of paying it. Set up automatic payments on your utilities, credit cards, and other monthly bills so that you never miss a due date.

Figuring out how much house you can afford will require you to check in with your finances. You’ll need to establish a comprehensive budget, and fastidiously track your income, spending, and savings. The more accurately you can how much money you have available to spend each month, the better you will be able to predict what kind of home you can afford. 

Then, you will want to research the area where you are looking to purchase your home and the average housing prices there. Using a tool like our rate calculator can give you a sense of how much you may each month for your mortgage, based on the cost of the home and your interest rate. Additionally, you will want to find out how much you would pay in other expenses – property taxes, neighborhood fees, maintenance, etc. 

Adding these sums together and comparing them against your monthly income and spending will give you a good understanding of what kind of home you can afford.

When you purchase a home, the property itself is not the only thing you’re paying for. There are a number of other costs that you will be required to pay at various stages of the homebuying journey. 

• Lender charges – Your lender may charge you a fee, sometimes known as an origination fee, for providing you the loan. 
• Closing costs – Buying a home will require you to pay for a number of third-party services; appraisal, private mortgage insurance, and others. 
• Taxes – Often, a transference of property comes with associated taxes that must be paid by the new owner. 

These are some of the extra expenses that may be incurred during the homebuying process. Talking to a mortgage broker can give you a better understanding of what you may expected to pay and help you budget correctly.

Mortgage rates are constantly shifting, and may even change throughout a given week. Since the mortgage process can take several weeks, this rate may even change over the course of your homebuying process. However, most lenders will give you the option to lock a given rate in, fixing it for the duration. The best time to lock your rate in is when rates are at their lowest in a given period of time. While rates may subsequently fall even lower, it’s better to lock a rate in when you know it will be low rather than wait for the perfect time. 

If a rate works with your budget and the lock period fits your timeline, it is often worth it to accept a lock. Some lenders also offer a one-time “float down” to a lower rate if rates fall during the lock period.

Simply put, escrow is when a third party – separate from both lender and borrower – holds on to something (usually money or the deed for a given property) until an agreement has been fulfilled. 

During the homebuying process, a buyer will typically make a “good faith payment” that shows they are serious about buying the property. If the sale doesn’t go through, then the seller keeps that money. During the sale process, that money is held in escrow. 

Escrow accounts are also used in other transactions too. Most lenders will establish an escrow account for a borrower when they take out their mortgage. Each month, a portion of the monthly mortgage payment is held in escrow, where it is then used to pay the property taxes and other monthly non-mortgage fees.