While a 20% down payment is ideal because it avoids Private Mortgage Insurance (PMI), it is not always required. For conventional home loans, down payments can be as low as 3% for first-time buyers. Government-backed FHA loans require just 3.5% down, and eligible VA borrowers may qualify for up to 100% financing with no down payment, subject to program and underwriting requirements.
Credit score requirements depend heavily on the specific loan program. Standard conventional loans generally require a minimum score of 620. Government FHA loans are much more lenient, allowing scores down to 580 with a 3.5% down payment. For self-employed individuals utilizing Non-QM bank statement programs, the minimum score is typically 600 to 620 depending on cash reserves.
A pre-qualification is a quick, basic estimate of what you might qualify for, based on unverified income and debt figures you verbally supply. A pre-approval is a formal, binding assessment where the lender pulls your credit report and fully verifies your official documentation (W-2s, tax returns, bank statements). Pre-approval letters hold significant weight when making formal home offers.
Absolutely! While traditional W-2 programs look for steady salary paystubs, we specialize in Non-QM alternative financing for self-employed individuals and business owners. Under our Bank Statement programs, we analyze 12 or 24 months of cash flow directly from your personal or business bank statements, allowing you to qualify without using standard tax returns or W-2s.
As a general rule, refinancing becomes highly beneficial if you can lower your interest rate by 0.75% to 1.00% or more, or if you wish to convert an Adjustable-Rate Mortgage (ARM) to a secure fixed-rate loan. Other strategic refinancing reasons include accessing built-up home equity (cash-out refinance) to pay off high-interest credit card debt, or eliminating private mortgage insurance (PMI).
The VA Interest Rate Reduction Refinance Loan (IRRRL) is an exclusive streamline benefit for veterans who already have an active VA home loan. It allows you to refinance your current VA loan into a lower interest rate with minimal documentation. No appraisal is required, no income verification is needed, and closing costs can be rolled entirely into the new loan balance.
Discount points are optional upfront fees paid directly to the lender at closing to permanently lower your interest rate (often called "buying down the rate"). One point equals 1% of your total loan amount. Paying points makes financial sense if you plan to stay in the home long enough to pass the "break-even point" (where the monthly interest savings exceed the initial upfront cost of the points).
On average, a standard home purchase loan takes 30 to 45 days from the time your purchase contract is signed to the day funds are wired. However, by acquiring a comprehensive pre-approval beforehand and responding to underwriter document requests immediately, we frequently clear files to close in under 21 to 25 days.