15 Mortgage FAQs: Your Massachusetts Mortgage Guide
Thinking about buying a home or investing in real estate in Massachusetts?
The mortgage process can be intimidating, especially if you’re a first-time home buyer.
We’ve collected some of the most frequently asked questions buyers ask about mortgage loans to help you feel more confident.
How do I know how much of a mortgage I can afford?
We recommend that your monthly mortgage payment be no more than 25% of your monthly take-home pay. Mortgage lenders will review your debt-to-income ratio to evaluate how much of your income goes toward all your current monthly debts. The lower the debt, the more you can borrow.
What’s the difference between pre-qualification and pre-approval?
Pre-qualification is a quick way to estimate how much you might be able to borrow, based on basic info you give me. It’s a good first step.
Pre-approval is more official. I’ll look at your credit, income, and finances to give you a more accurate number. Sellers usually take pre-approvals more seriously when you make an offer on a house.
Note: I’m always available to issue a pre-approval for your offer.
We will go over qualifications, mortgage programs, credit report and issue official mortgage pre-approval to you or your real estate representative.
It’s very important to start this early so we can work on any detrimental issues, get them resolved, and be ready and ahead of any other competitive buyers.
How does credit score affect a mortgage loan?
A credit profile is a record that shows how you’ve handled money you’ve borrowed in the past. It shows if you’ve paid your bills on time and how you manage your debts.
Your mortgage credit score, also called a FICO score, is a number based on different parts of your credit history. It comes from three credit agencies and can affect the mortgage rate you get — higher scores usually mean better rates.
What’s the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage has the same interest rate for the life of the loan. So your monthly mortgage payment is the same for the life of the loan.
An adjustable-rate mortgage (ARM) starts with a lower rate, but it can go up or down after a few years. ARMs can be good if you don’t plan to stay in the home long-term.
How much down payment do I need?
It depends on the type of mortgage loan. Some loans need as little as 3% down. If you’re a veteran or buying in certain areas, you might not need any down payment at all.
When should I think about refinancing my mortgage?
Refinancing means replacing your current loan with a new one. Homeowners do this to get a lower mortgage rate, shorten their loan term, or take out cash. If rates have dropped or your financial situation has improved, it might be worth exploring.
Note: Typically, I recommend a No Points, No Closing Costs Refinance, which saves you money today and allows you to refinance again if needed.
How do I know what type of mortgage is right for me?
We’ve put together a list of the various types of mortgages with pros and cons. Click to learn more about mortgages.
Still have questions?
That’s what I’m here for.
Contact me, I’m happy to help you understand your options and feel confident with the mortgage process.
We’ll look at your budget, goals, and how long you plan to stay in the home.
Then I’ll walk you through your best options, explain the pros and cons, and help you make the best choice for your situation.
What My Clients Say
Joanne DiPietro, DiPietro Law PC
"Harry takes the time with his clients to be sure they understand the product. He assists them with complete integrity and experience. Harry has also spearheaded the resurgence of the Walpole Chamber of Commerce which is an asset to business owners in the Walpole community."