FAQ

Select the Mortgage That Fits Your Needs

Do I need great credit to get a mortgage?

No, you do not necessarily need a good credit score however it helps with your interest rate. The lower your FICO score, the higher is your interest rate. It is possible to get a conventional mortgage with a FICO credit score as low as 620, and you can obtain a higher-cost FHA mortgage with a FICO score 580.

How much of a down payment do I need?

One can obtain a conventional mortgage with as little as 3% down, an FHA loan with 3.5% down. VA or USDA loan requires zero down payment. However, with a conventional or FHA loan, you'll have to pay private mortgage insurance, aka PMI, if your down payment is less than 20% of the home's sale price.

What are closing costs, and how much should I expect them to be?

It varies but expect to pay 2% to 3% of the home price in closing cost

Should I choose a fixed-rate or an adjustable-rate mortgage?

It is extremely important to choose the type of loan that will best suit your current circumstances. 30-year Fixed rate makes good financial sense for long-term goal. But if you plan to sell the home in 5 to 7 years, an ARM could end up saving you thousands of dollars.

Should I "lock" my interest rate?

Interest rates are unpredictable, so it is always good idea to lock in the rate

What type of mortgage is best for me?

There are several different types of mortgages to choose from and it is best to consider there Pros and Cons. A conventional mortgage is tougher to qualify for credit-wise, but an FHA loan can be pricier. If you're a veteran, a VA loan could be the best option for you, and if you plan to buy a home in a rural area, a USDA mortgage could give you a no-money-down option.

What are discount points, and should I pay them?

Money that you pay up front on your mortgage in exchange for a lower interest rate.It can be a good financial saving idea.

Should I get a 15-year or 30-year term loan?

This depends on how much monthly payment you can afford. 15-year comes with a lower interest rate.

What documentation should I gather?

Your lender may ask for many different items, but in general, be prepared to show all the following:

  • Income verification (Last two years' tax returns, W-2s, 1099s, and your last few pay stubs)
  • Drivers' license and Social Security card/passport
  • Bank statements
  • Proof of funds to close

If some or all of your down payment is coming from a gift, you will need gift letter from the source of the funds that confirm they are a gift, not a loan.

What is a pre-qualification?

A pre-qualification is a basic review of your finances to determine if you would qualify for a mortgage.

What is a pre-approval?

Lender will check your credit, verify your income and employment, and commit to lending a certain amount of money

What is an escrow account?

Why does it take so long to close a mortgage?

Mortgages tend to take at least 20-30 days to originate, and many first-timers don't expect this much of a waiting period. At TC Mortgage, Inc. we can close your mortgage in 20 days.

How is my mortgage payment determined?

There are four parts of your mortgage payment – Principal, Interest, Taxes and Insurance commonly refer to as PITI.

Will my monthly payments change during the loan term?

Probably. Even with a fixed-rate loan, your payment is likely to change over time because your escrow account tends to fluctuate. Meaning, property taxes, and insurance expenses can increase or decrease.