FAQ
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1. What is a mortgage?
A mortgage is a loan used to purchase real estate, where the property serves as collateral. The borrower agrees to repay the loan with interest over a set period, typically 15 to 30 years.
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2. How do I qualify for a mortgage?
Qualification depends on factors like credit score, income, employment history, debt-to-income ratio, and the amount of the down payment. Lenders evaluate these to assess your ability to repay the loan.e.
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3. What types of mortgages are available?
Common types include fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, USDA loans, jumbo loans, and interest-only loans.
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4. What is a fixed-rate mortgage?
A fixed-rate mortgage has a constant interest rate and monthly payments that never change over the life of the loan, making it easier to budget.
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5. How much down payment is required?
The required down payment varies by loan type and lender, but it typically ranges from 3% to 20% of the property's purchase price. Some programs, like VA and USDA loans, may offer 0% down payment options.
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6. What are closing costs?
Closing costs are fees associated with obtaining a mortgage, such as loan origination fees, appraisal fees, title insurance, and attorney fees. They typically range from 2% to 5% of the loan amount.