Frequently Asked Questions When Applying for a Mortgage (Pt. 5)
Robins Financial Credit Union is dedicated to our mission to be Member Focused, Financial Partners, Community Proud. We empower our members with the financial knowledge and resources they need to make informed decisions and achieve their financial goals.
Applying for a mortgage can seem like a daunting process, especially if you're not sure where to begin. As your trusted financial partner, we’re here to simplify the journey. We know our members often have questions about the requirements, the steps involved, and how to set themselves up for success – and we’re here to help.
In this article, we will dive into the answers to some of the most frequently asked questions with Mortgage Loan Originator, Jason Atkinson. Whether you’re a first-time homebuyer or just looking to refresh your knowledge, this guide will give you the clarity and confidence you need to start your homeownership journey. Let us help you clear up the confusion and get one step closer to making your dream home a reality.
Q: What is the difference between pre-qualification and pre-approval?
Jason: Typically, a pre-qualification can be more easily obtained and is based on information you provide verbally to your loan officer. Things such as your credit score, annual income, monthly debts and available assets are given to allow the loan officer to manually estimate a maximum purchase price, estimated payment, and estimated closing fees.
Getting a pre-approval is taking this one step further and completing a formal loan application, giving consent to having your credit pulled and providing the supporting documents to verify the previously provided information discussed like your credit score, income and assets. Once this step is complete, the loan officer will then be able to provide a loan commitment. Your loan commitment is a formal agreement or letter from your lender stating that they will provide a specific amount of money for your mortgage.
Q: Can I get a mortgage if I’m self-employed or have irregular income?
Jason: You can certainly apply for and obtain a mortgage in either circumstance. In these situations, we typically ask for more documentation, including tax returns, to confirm your income over a period of time. This will show the consistency of that particular income. We usually advise our members to keep a good record of all income with their tax professional to make the homebuying process as smooth as possible.
Q: Can I refinance my mortgage, and when should I consider it?
Jason: The definition of refinancing your home is paying off an existing mortgage with a new one, therefore qualifying to refinance is similar to when you purchased initially. It will be based on the same criteria such as your credit score, income, assets, and overall debt-to-income ratio. Depending on the amount you put down for a down payment at the time of purchase, you may need to wait until you’ve paid down on your principal balance before considering a refinance.
When you consider a refinance, you are trying to lower your interest rate, reduce your mortgage loan terms, or change from one type of mortgage to another (i.e. from adjustable- to fixed-rate). Some homeowners choose to refinance so they can consolidate debt, fund home improvements, or use their home equity for some other purpose.
Q: What is a Mortgage Servicer?
Jason: A Mortgage Servicer is a company that manages mortgage loans after the closing. Robins Financial Credit Union is a servicer of all conventional mortgages we make, and we do so for the life of the loan, which is a huge advantage for our members over the long term. This can make all the difference when you need to speak to someone right away. Sometimes other Mortgage Servicers can be in different time zones or even different countries, making communication difficult. With Robins Financial, you’ll be able to easily call or visit your nearest branch to have all of your questions answered.
Next Steps
Applying for a mortgage doesn’t have to be overwhelming. With the right guidance and answers to your questions, you can approach the process with clarity and confidence. At Robins Financial Credit Union, we are committed to supporting you every step of the way.
- Visit our Knowledge Center to find more informational blogs about the home buying process, various mortgage loans, and what you can expect at your mortgage loan closing.
- Visit our website for a step-by-step guide through the Homebuying Process
- Tune into our YouTube channel to watch our Buying a Home series
If you need assistance or have additional questions about applying for a mortgage loan, make an appointment to speak to one of our Mortgage Specialists today!
Read our other blog articles to help you gain the financial knowledge you need to succeed.