Mortgage FAQ
Plain-English answers to common mortgage questions. Each entry has its own page with a detailed answer, related links, and current pricing.
Can I get a mortgage with bad credit?
Yes. FHA loans accept 580+ FICO with 3.5% down (500+ with 10% down). Non-QM and DSCR programs go further down for specific scenarios.
How much down payment do I need for FHA?
3.5% with 580+ FICO. 10% with 500-579 FICO. Down payment can come from gift funds or DPA programs.
Can self-employed borrowers get a mortgage without tax returns?
Yes. Bank statement, P&L-only, 1099-only, and asset-qualifying programs let self-employed borrowers skip tax returns entirely.
Can I get a mortgage with only 1 year of self-employment?
Yes if you had W-2 employment in the same industry the year prior. Some non-QM programs accept 1 year unconditionally.
How long after bankruptcy can I get a mortgage?
FHA: 2 years post-Chapter 7 (1 year post-Chapter 13 with payments). Conventional: 4 years. Non-QM: as little as 12 months.
How long after foreclosure can I get a mortgage?
FHA: 3 years. VA: 2 years. Conventional: 7 years (3 years with extenuating circumstances). Non-QM: as little as 12-24 months.
Can I buy a house with no credit history?
Yes. FHA accepts manual underwriting with 12 months of alternative credit (rent, utilities, insurance). Some non-QM programs also work.
How much down payment do I need for a jumbo mortgage?
15% with 700+ FICO at most lenders. 10% available at some banks for 740+ FICO with strong reserves.
How can I get a mortgage without a W-2?
Self-employed: bank statement, P&L-only, 1099-only, or asset-qualifying. Retirees: asset-qualifying. Investor: DSCR.
What is the difference between a co-borrower and a co-signer?
A co-borrower is on the title and the loan. A co-signer guarantees the loan but is usually not on title.
How can I improve my credit score before applying for a mortgage?
Pay revolving balances below 30% utilization, dispute incorrect items, avoid new accounts, and pay all bills on time for 6+ months.
What is the difference between mortgage pre-approval and pre-qualification?
Pre-qualification is a soft estimate based on stated info. Pre-approval is a verified commitment based on actual credit, income, and asset documentation.
How much house can I afford?
Use the 28/36 rule: housing payment under 28% of gross income, total debts under 36%. Lenders cap DTI at 43-50% on most loans.
What is a good mortgage rate?
Compare to current market average (Freddie Mac PMMS). A "good" rate is 0.125-0.5% below average for your specific FICO and LTV.
How long does mortgage approval take?
Pre-approval: 1-3 days. Full underwriting: 30-45 days from contract to close. Some streamlined refinances close in 14-21 days.
Can I buy a house with 1099 income only?
Yes. 1099-only loans, bank statement loans, and conventional loans (with 2 years of 1099 history + tax returns) all work for 1099 borrowers.
Conventional or FHA - which is better for me?
Conventional with 5%+ down at 700+ FICO is usually better long-term. FHA wins for sub-680 FICO or under-5% down or recent credit events.
Is mortgage interest tax deductible?
Yes, on up to $750K of mortgage debt for primary and second homes (post-2017 mortgages). Itemize on Schedule A. Most homeowners no longer itemize due to the higher standard deduction.
Are mortgage points tax deductible?
Yes, but treatment differs. Purchase: deduct in year paid. Refinance: amortize over loan term. Investment property: amortize regardless.
Do I pay capital gains tax when I sell my home?
Section 121 exclusion: $250K single / $500K married excluded if you owned and lived in the home 2+ of the last 5 years. Above the exclusion, you pay capital gains.
How much do I save on taxes from mortgage interest?
Tax savings = (mortgage interest paid) × (your marginal tax rate), but only if you itemize. Most homeowners save $0 because they take the standard deduction.
Is property tax tax deductible?
Yes, but combined state-and-local-tax (SALT) deduction is capped at $10K for personal residences. No cap on rental property.
How do I use my VA loan benefit after retiring from the military?
Get a Certificate of Eligibility through VA.gov, then apply with any VA-approved lender. VA loans require 0% down, no PMI, and credit standards are more flexible than conventional.
Can I buy my parents' house below market value (gift of equity)?
Yes. The difference between fair market value and purchase price is a "gift of equity" that counts as your down payment. FHA, conventional, and most loan types allow this.
Can I get an FHA loan after Chapter 7 bankruptcy with a 605 credit score?
Yes. FHA requires 24 months past Chapter 7 discharge with re-established credit. 605 FICO qualifies at 3.5% down (FHA needs 580+).
How do day traders or self-employed investors qualify for a mortgage with no W-2?
Bank statement loans qualify on deposit history; asset-qualifying / asset-depletion loans qualify on liquid balances. Both skip W-2 and tax returns.
Can I get a mortgage with no credit score?
Yes. FHA and VA loans allow manual underwriting using non-traditional credit (rent, utilities, insurance, cell phone payments). Manual UW is more paperwork but it works.
Can I HELOC my rental property to pay for repairs on my primary residence?
Yes. Investment-property HELOC proceeds can be used for anything, including primary-residence repairs. Investment HELOCs typically allow up to 75-80% CLTV.
How do I finance a fixer-upper that needs major repairs?
FHA 203(k) and conventional HomeStyle Renovation loans roll purchase + repair costs into one mortgage. Hard money + refi is the alternative for tighter deals.
How does student loan payment resumption affect my mortgage qualification?
Lenders use the higher of the actual monthly payment or 0.5% of outstanding balance for DTI. Deferred or IDR plans are calculated specifically per loan program.
Today's mortgage rates
Conventional
6.250%
6.288% APR
FHA
5.750%
5.780% APR
VA
5.750%
5.780% APR
Conv: 80% LTV, 780 FICO. FHA: 96.5% LTV, 680 FICO. VA: 100% LTV, 680 FICO. 30-yr fixed. Your rate may vary.