Find clear answers to common mortgage questions with ARBOR Financial Group. Learn more about the loan process, home financing options, eligibility, refinancing, and what to expect as you move toward homeownership.
A Conventional Loan is a traditional mortgage that isn’t backed by the government. It’s ideal for borrowers with good credit, stable income, and enough savings for a down payment of 3% or more. These loans can be used for primary residences, second homes, or investment properties, and may offer lower overall costs than government-backed options if you qualify.
A fixed-rate mortgage has the same interest rate and payment for the life of the loan, while an adjustable-rate mortgage (ARM) starts with a fixed rate for a set period and then adjusts periodically. ARMs often offer lower initial rates but can increase over time.
Loan-to-value ratio (LTV) compares the size of your loan to the value of the property. For example, if your home is worth $300,000 and you borrow $240,000, your LTV is 80%. A lower LTV usually means better loan terms and lower risk for the lender.
PMI is a type of insurance that protects the lender if you stop making payments. It’s typically required for conventional loans when your down payment is less than 20%. You can usually cancel PMI once you reach 20% equity in your home.
Q: How do I apply for a mortgage with ARBOR Financial Group? Start by speaking with one of our loan advisors or applying online. We’ll guide you through the application, which includes submitting financial documents, verifying your credit, and determining the best loan program for your needs.
Q: What documents will I need to provide for a mortgage application? You’ll typically need pay stubs, W-2s or tax returns, bank statements, a government-issued ID, and information about your debts and assets. Self-employed borrowers may need to provide additional income verification.
Q: How long does it take to get approved for a mortgage? Pre-approvals can often be completed in 24–48 hours with the right documentation. Full loan approval may take a few weeks, depending on underwriting, appraisals, and other steps in the process.
Q: Should I get pre-qualified or pre-approved, and what’s the difference? Pre-qualification is a quick estimate of how much you might be able to borrow based on self-reported info. Pre-approval is a more detailed process where a lender verifies your finances and credit to give you a conditional loan offer.
Q: What credit score do I need to qualify for a home loan? Minimum credit scores vary by loan type. FHA loans often accept scores around 580, while conventional loans typically require 620 or higher. A higher score may help you qualify for better rates.
Q: How much down payment is required to buy a home? Conventional loans often require 5% to 20% down, while FHA loans require as little as 3.5%. VA and USDA loans may offer zero down options. Your exact requirement depends on the loan program and your financial profile.
ARBOR Financial Group offers a full range of home loan solutions designed for a wide variety of borrowers. These include: Conventional Loans, FHA Loans, VA Loans, USDA Loans, Jumbo Loans, Reverse Mortgages, and HELOCs. We also specialize in Non-QM loans such as Bank Statement Loans, 1099 Loans, Asset-Based Loans, and Profit & Loss Loans. Real estate investors can explore DSCR (Debt Service Coverage Ratio) Loans, while first-time buyers may benefit from Down Payment Assistance (DPA) programs. Construction Loans, Interest-Only Mortgages, and ITIN Loans are also available. Whether you’re purchasing, refinancing, or investing, our team will help you find the right fit.
An FHA loan is a government-backed mortgage designed for buyers with lower credit scores or smaller down payments. It requires at least 3.5% down and is popular with first-time buyers. Income and property limits may apply.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs for eligible veterans, active-duty service members, and some surviving spouses. It offers zero down payment, no PMI, and competitive interest rates.
A USDA loan is a zero-down mortgage option for buyers in eligible rural or suburban areas. It’s designed for moderate-income borrowers and comes with low rates and reduced mortgage insurance costs.
Jumbo loans are used to finance homes that exceed conforming loan limits set by Fannie Mae and Freddie Mac. They typically require higher credit scores, larger down payments, and may have stricter income requirements.
Non-QM (Non-Qualified Mortgage) loans are designed for borrowers who don’t meet traditional lending guidelines. This includes self-employed individuals, real estate investors, or those with unique income situations. Non-QM options include bank statement loans, asset-based loans, 1099 income loans, and more.
A Bank Statement Loan is ideal for self-employed borrowers who have strong cash flow but can’t qualify using traditional tax returns. Lenders use 12–24 months of personal or business bank statements to determine income, making it a flexible option for entrepreneurs.
A 1099 Mortgage Loan is designed for independent contractors or gig workers who receive income via 1099 forms instead of W-2s. These loans use 1099 documents and bank statements to verify income, helping non-traditional earners qualify for financing.
An Asset-Based Loan allows borrowers to qualify using their liquid assets rather than traditional income. Lenders calculate income based on assets like retirement accounts, investment portfolios, and savings. It’s a great fit for retirees or high-net-worth individuals.
A P&L (Profit and Loss) Loan is ideal for business owners who can’t qualify using tax returns. Instead, income is verified through CPA-prepared profit and loss statements. This option suits borrowers with complex or fluctuating income.
Foreign National Loans, also known as Non-U.S. Citizen Mortgages, are designed for borrowers who do not have a Social Security number but want to buy or refinance property in the U.S. These programs typically use an Individual Taxpayer Identification Number (ITIN) to verify identity. They help foreign nationals and undocumented immigrants become homeowners without traditional U.S. credit or documentation. Loan terms, eligibility requirements, and down payments vary by program, but these loans open doors to homeownership for those living and working in the U.S. under alternative legal statuses.An ITIN Loan helps non-citizen borrowers without a Social Security number purchase or refinance a home using their Individual Taxpayer Identification Number. These loans make homeownership accessible for foreign nationals and undocumented immigrants.
A Construction Loan provides short-term financing to build a new home or significantly renovate an existing one. Funds are typically released in stages as the project progresses, and the loan may convert to a permanent mortgage upon completion.
An Interest-Only Loan allows you to pay only the interest for an initial period (typically 5–10 years), resulting in lower monthly payments. After that, you begin paying both principal and interest. It’s often used by investors or buyers expecting higher future income.
A DSCR (Debt Service Coverage Ratio) loan is made for real estate investors and qualifies the borrower based on the property’s cash flow rather than personal income. If rental income covers the loan payment, you may be eligible. It’s ideal for growing rental portfolios.
DPA programs help eligible buyers with part or all of their down payment and/or closing costs. These programs are especially helpful for first-time homebuyers and can be offered through state, local, or nonprofit agencies. Eligibility is usually based on income, location, and purchase price.
A reverse mortgage allows homeowners 62 or older to convert part of their home equity into cash without selling the home. Repayment is deferred until the borrower sells the home, moves out, or passes away.
A Home Equity Loan is a second mortgage that provides a lump sum of money using the equity in your home. It typically has a fixed interest rate and fixed repayment term, making it a predictable option for financing large expenses like home improvements, medical bills, or debt consolidation.
A HELOC (Home Equity Line of Credit) lets you borrow against your home’s equity as needed, like a credit card. It usually has a draw period followed by a repayment period and often features a variable interest rate. HELOCs are useful for ongoing or flexible expenses.
Rates are influenced by market conditions, economic trends, and your credit score, loan amount, down payment, and loan type. Locking in a rate at the right time can help you save over the life of your loan.
APR (Annual Percentage Rate) includes both the interest rate and other loan-related fees. It reflects the total cost of borrowing over time, helping you compare loan offers more accurately.
Yes, ARBOR Financial Group offers rate locks to protect you from market changes during the loan process. Locks typically last 30 to 60 days, and your loan advisor will help you choose the right time to lock.
Discount points are upfront fees paid to reduce your interest rate. One point equals 1% of the loan amount. Paying points can save money in the long term but may not be ideal if you plan to sell or refinance soon.
Closing costs typically range from 2% to 5% of the loan amount. These include lender fees, title insurance, appraisal fees, and prepaid taxes and insurance. You’ll receive a Loan Estimate early in the process outlining these costs.
What happens at closing? You’ll sign all final documents, pay any remaining costs (like your down payment and closing costs), and finalize the loan. Once everything is signed and recorded, you’ll receive the keys to your new home.
What should I bring to closing? Bring a government-issued photo ID, any outstanding paperwork your lender requested, and certified funds or proof of wire transfer for the down payment and closing costs. Your closing agent will provide a checklist.
When is my first mortgage payment due? Your first payment is typically due on the first day of the second month after closing. For example, if you close in June, your first payment may be due August 1.
What is an escrow account and why is it required? An escrow account is used to collect and pay your property taxes and homeowners insurance. It helps ensure these bills are paid on time and spreads the cost over monthly payments.
What is refinancing and why do people do it? Refinancing replaces your current mortgage with a new one, often to lower the interest rate, change the loan term, or access home equity. It can help reduce monthly payments or pay off your loan faster.
What’s the difference between a rate-and-term refinance and a cash-out refinance? A rate-and-term refinance changes your interest rate or loan length. A cash-out refinance increases your loan balance so you can take out cash based on your home’s equity—commonly used for home improvements or debt consolidation.
Are there closing costs when refinancing? Yes, refinancing usually comes with similar closing costs as a purchase loan. These can include lender fees, appraisal costs, and title services. Some fees may be rolled into the new loan balance.
When is the best time to refinance? The best time to refinance is when interest rates drop significantly, your credit score has improved, or you want to change loan terms. Consult with a loan advisor to calculate potential savings and costs.
