Loan FAQ Library

Loan basics

What is the difference between a home equity loan and a HELOC?

Both a home equity loan and a home equity line of credit (HELOC) let you borrow against the equity in your home. A home equity loan provides a lump sum with a fixed interest rate a...

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Loan basics

What is a conforming loan?

A conforming loan meets the guidelines set by Fannie Mae and Freddie Mac, including loan size limits, credit requirements, and down payment minimums. For 2024, the conforming loan...

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Loan basics

What is a jumbo loan?

A jumbo loan is a mortgage that exceeds the conforming loan limit set by the Federal Housing Finance Agency — $766,550 in most areas for 2024. Because jumbo loans cannot be purch...

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Loan basics

What is the difference between a mortgage broker and a direct lender?

A mortgage broker is an intermediary who shops your loan application to multiple lenders and earns a commission when a loan closes. They offer access to a wide range of loan produc...

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Loan basics

How does loan term length affect the total interest paid?

The longer your loan term, the lower your monthly payment — but the more total interest you pay over the life of the loan. On a $300,000 mortgage at 7%, a 30-year loan costs abou...

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Loan basics

What is a no-closing-cost mortgage?

A no-closing-cost mortgage allows you to finance or roll your closing costs into the loan rather than paying them upfront. The lender either adds the closing costs to the loan bala...

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Loan basics

What is a mortgage?

A mortgage is a loan used to purchase or refinance real estate, where the property itself serves as collateral. The borrower agrees to make monthly payments over a set term (typica...

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Loan basics

What credit score do I need to buy a home?

The minimum credit score depends on the loan type:FHA Loan: 500 minimum (580+ for 3.5% down)VA Loan: No official minimum (lenders typically require 620+)Conventional: 620 minimumJu...

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Loan basics

How much can I borrow for a home loan?

Your maximum loan amount depends on several factors:Debt-to-Income (DTI) ratio: Most lenders want your total monthly debt (including new mortgage) below 43-45% of gross monthly inc...

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Loan basics

What is APR and how is it different from interest rate?

Interest Rate is the cost of borrowing the principal loan amount. APR (Annual Percentage Rate) includes the interest rate PLUS additional fees (origination fees, mortgage points, m...

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