A Jumbo loan is a loan for more than the conforming loan limit set by Fannie Mae, Freddie Mac and the Federal Housing Finance Agency (FHFA). The
conforming loan limit can change annually, which affects the amount of a Jumbo loan. Talk to a loan originator for exact details in your area.

PMI insures your lender for part of your loan, not the full amount, if the loan is not repaid. This typically applies to conventional loans.

PMI may be necessary when a down payment is below 20%. Depending on the credit history of the homebuyer, PMI may cost between approximately 0.25% – 2.00% of the amount borrowed. And if you eventually build 20% equity in your home, you may be able to ask the lender to cancel the PMI.

An FHA loan is an insured loan made by the private lender that allows borrowers to purchase with a down payment as low as 3.5%.

VA loans don’t have any PMI requirements even though they allow a 0% down payment, but have a VA Funding Fee.

Your credit limit is determined by your security deposit. You can use your secured credit card like any credit card to make purchases such as gas or groceries, or for recurring phone bills, without changing your total monthly budget. And, just like a credit card, you make monthly payments of principal and interest. Some cards, like the Capital Bank OpenSky® Secured Visa® Credit Card report to all three major credit bureau monthly. You can open an account for as little as $200 or up to $3,000 (subject to approval). By managing credit responsibly, you can improve your score.

An FHA loan is a government insured home loan with more flexible lending requirements than conventional mortgages. It’s available for homeowners with down payments as low as 3.5%.  The lower credit score requirements may make it a good option for a first-time home buyer or a home buyer needing a lower down payment.

While mortgage insurance can be more costly than a Conventional loan, it could be a great option to get you into your first home.

There may be alternatives to providing a 20% down payment on the purchase of your home. By paying Private Mortgage Insurance (PMI) premiums with your monthly payment on a Conventional loan, the down payment requirement may be reduced to 15% down, 10% down, 5% down and in some instances for a 1st time homebuyer even as little as 3% down. Some other options include FHA insured loans which require as little as 3.5% and also have Mortgage Insurance Premiums (MIP). Veterans Administration (VA) guaranteed loans also have low down payment options. To learn about PMI check out our FAQ on Private Mortgage Insurance.

An ARM is a loan with an interest rate that changes at the scheduled adjustment date based on movements in an index rate, such as the rate for Treasury securities. ARMs usually offer a lower initial interest rate than fixed-rate loans. The interest rate fluctuates over the life of the loan based on market conditions, but the loan agreement generally sets maximum and minimum rates. When interest rates increase, generally your loan payments increase; and when interest rates decrease, your monthly payments may decrease. Depending on the type of ARM loan, the interest rate and monthly payment will change every month, quarter, year, three years, five, seven or ten years. The period between rate changes is called the adjustment period. For example, a loan with an adjustment period of one year is called a one-year ARM, because the interest rate and payment change once every year; a loan with a three-year adjustment period is called a three-year ARM.

Some ARMs have interest-rate caps and the cap may hold your rate and payment below what it would have been if the change in the index rate had been fully applied. Since the increase in the interest that was not imposed due to the rate cap the amount it could adjust to will carry over, at the next future rate adjustment, your payment might increase, even is the index rate has stayed the same or declined.

This is often considered for homebuyers who intend on staying in their home for several years, a fixed-rate loan has a predictable monthly payment for the life of the loan.  The duration of the loan impacts the dollar amount of the monthly payment, amount of interest paid, amount of time to build equity in a home, and length of time to pay off the loan.

Longer term loans have lower monthly payments and pay more interest over the life of the loan, taking longer to build equity and pay off the mortgage.

Shorter term loans have higher monthly payments and pay less interest over the life of the loan, taking less time to build equity and pay off the mortgage.

In general, the longer your loan term, the more interest you will pay. Loans with shorter terms usually have lower interest costs but higher monthly payments than loans with longer terms.


Yes, you may use your own title company or use one from our preferred provider list. The lender, nor anyone else, can require you to purchase the insurance from a particular title company for either the lender’s coverage title insurance or the optional owner’s coverage title insurance. The title insurance and coverage must meet the lender requirements, though for the lender’s coverage.

Yes. Your lender will want to be sure the property has a clear title and will require a Lender’s Coverage Title Insurance policy. It is optional to purchase an Owner’s Coverage Title Insurance policy to protect yourself from threats to your title and ownership that may have gone undiscovered at the time of closing.

You always have the option to buy down the interest rate by paying discount points.

The interest rate is the cost you will pay to borrow the money for a mortgage.  It does not include fees or other charges you may pay to obtain the mortgage.

The Annual Percentage Rate (APR) is the total cost of the loan, other charges or fees and is calculated by spreading the upfront costs over the life of the loan and expressing this as a percentage of the loan amount that you pay each year.

The APR reflects not only the interest rate but also any points, mortgage origination fees, and other charges that you pay to get the loan.

A pre-qualification is a letter provided to a buyer from a loan officer. It is intended to provide an indication of the mortgage the buyer might qualify for.

A pre-approval letter from a lender, however, is a letter that indicates a conditional commitment to lend. There are always conditions for things not done yet like an appraisal or title work, and possibly conditions related to things a buyer still needs to provide. But it allows the loan originator to firmly state that the buyer qualifies for a specific mortgage amount, provided all conditions are eventually met and, based on an underwriter’s review of their financial information, including their credit report, pay stubs, bank statement, salary, assets and obligations which is documentation provided by the buyer.