Frequently asked questions
We now have an FAQ list that we hope will help you answer some of the more common ones.
1. What information do I need to provide when applying for a mortgage?
You’ll need details about your income, employment history, credit score, and information about the property you want to purchase. The benefit of using YoMo is that you will provide this information once and we will share it with multiple lenders.
2. How is my credit score evaluated during the mortgage application process?
Lenders assess your credit score to evaluate your creditworthiness. A higher credit score often leads to better loan terms.
3. What is the difference between a fixed-rate and an adjustable-rate mortgage (ARM)?
A fixed-rate mortgage maintains the same interest rate throughout the loan term, providing predictable monthly payments. An ARM has a variable interest rate, which may change over time.
4. How much can I borrow for a mortgage?
The amount you can borrow depends on factors like your income, credit score, and debt-to-income ratio. Lenders typically use a percentage of your income to determine the loan amount.
5. What is a down payment, and how much do I need to put down?
A down payment is an upfront payment made when purchasing a home. The amount varies but is commonly around 20% of the home’s purchase price. Some programs allow for lower down payments.
6. Can I apply for a mortgage if I have a low credit score?
While a higher credit score is generally preferred, some lenders offer mortgage options for individuals with lower credit scores. However, these may come with higher interest rates.
7. How does the pre-approval process work?
Pre-approval involves a lender reviewing your financial information to determine the amount you can borrow. It provides a clearer picture of your home-buying budget.
8. What is private mortgage insurance (PMI), and when is it required?
PMI is typically required when the down payment is less than 20%. It protects the lender in case of default but adds an extra cost to your monthly payments.
9. How long does the mortgage application process take?
The timeline can vary, but on average, the process takes 30 to 45 days from application to closing. Delays can occur due to various factors, including the property appraisal and verification of financial information.
10. Can I make extra payments on my mortgage?
Many mortgages allow for extra payments, which can help reduce the overall interest paid and shorten the loan term. Check with your lender for specific terms and conditions.