What is the main purpose of a fixed-rate mortgage?
A fixed-rate mortgage maintains the same interest rate and monthly payment for the life of the loan.
Which mortgage product is ideal for borrowers expecting to move or refinance soon?
Adjustable-rate mortgages (ARMs) start with lower rates and are suitable for short-term property ownership.
What does 'pre-qualification' mean in the mortgage process?
Pre-qualification estimates how much a borrower may be eligible to borrow based on basic financial information.
What is the loan-to-value (LTV) ratio used for?
LTV ratio compares the loan amount to the appraised property value to assess lending risk.
What is a common feature of government-backed loans?
FHA, VA, and USDA loans are insured or guaranteed by the government and often offer flexible qualification standards.
Which document outlines the final terms and costs of a mortgage loan?
The Closing Disclosure provides key details including loan terms, projected payments, and closing costs.
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What does mortgage underwriting involve?
Underwriting is the process of evaluating a borrower’s creditworthiness and property risk before loan approval.
Which factor can affect mortgage interest rates?
Credit score, loan type, market conditions, and down payment can influence mortgage interest rates.
What is mortgage insurance typically required for?
Mortgage insurance protects lenders when borrowers have down payments less than 20% of the home’s value.