FREQUENTLY ASKED QUESTIONS
Everything you need to know about the mortgage process with Pure Lending. We're here to make home financing clear and accessible.
General Questions
What is a mortgage exactly?
A mortgage is a loan specifically for purchasing real estate. The property itself serves as collateral, meaning the lender can take possession if the loan isn't repaid. It consists of principal (the amount borrowed) and interest (the cost of borrowing).
How do I apply for a home loan?
The process starts by clicking our 'APPLY NOW' button. You'll complete a secure online application, and then one of our loan officers, like Mamta Kasthuri, will reach out to discuss your goals and guide you through the next steps.
What is an appraisal?
An appraisal is an unbiased professional opinion of a home's value. Lenders require it to ensure the property is worth the amount being borrowed, protecting both the lender and the buyer from potentially overpaying.
What happens at closing?
At closing, you sign all the legal documents for the home purchase and the mortgage. You'll pay your down payment and closing costs, and the property title is transferred to you. Once authorized, you officially receive the keys!
Qualification & Credit
What credit score do I need for a mortgage?
While a higher score often means better rates, programs like FHA may allow for scores as low as 580. Conventional loans typically require 620+. We specialize in finding the right program for your specific credit profile.
What is a Debt-to-Income (DTI) ratio?
DTI is the percentage of your gross monthly income that goes toward paying debts. Lenders use this to measure your ability to manage monthly payments. Most programs look for a DTI below 43-50%, depending on the loan type.
How is my credit judged by lenders?
Lenders evaluate your credit score alongside your payment history, the amount of credit you currently use, and the length of your credit history. This helps them assess your risk and determine your interest rate.
What can I do to improve my credit score?
To improve your score, consider these steps:
• Pay all bills on time, every time.
• Keep credit card balances below 30% of their limits.
• Avoid applying for new credit lines before your loan application.
• Fix errors or inaccuracies on your credit report.
What is PMI (Private Mortgage Insurance)?
PMI is insurance that protects the lender if you default on your loan. It is usually required if your down payment is less than 20% of the home's purchase price. Once you reach 20% equity, you can generally request its removal.
What is 80-10-10 financing?
Also called a 'piggyback loan,' this involves an 80% first mortgage, a 10% second mortgage (like a HELOC), and a 10% cash down payment. This strategy is frequently used to reach a 20% total down payment equivalent and avoid paying PMI.
Rates & Fees
What are closing costs and how much will I pay?
Closing costs are fees associated with processing and finalizing your loan, such as appraisal fees, title insurance, and taxes. Typically, they range from 2% to 5% of the purchase price. We provide a detailed estimate early in the process.
When should I refinance?
Refinancing makes sense if you can lower your interest rate, reduce your monthly payment, or switch from an adjustable to a fixed-rate mortgage. Common advice suggests refinancing if you can lower your rate by at least 1%.
What are points?
Points, also known as discount points, are fees paid directly to the lender at closing in exchange for a lower interest rate. One point typically costs 1% of the total loan amount and can save you thousands in interest over time.
Should I pay points to lower my interest rate?
It depends on how long you plan to stay in your home. If you stay long enough for the monthly savings from the lower rate to overcome the initial cost of the points (the break-even point), it is generally a smart financial move.
What is an APR?
The Annual Percentage Rate (APR) reflects the true cost of borrowing, as it includes the interest rate plus other fees such as points and broker charges. The APR is composed of:
• The note interest rate
• Discount points and origination fees
• Private Mortgage Insurance (PMI)
• Loan processing and credit costs.
What does it mean to lock the interest rate?
A rate lock is a guarantee from your lender that your interest rate won't change between the time you apply and closing, provided you close within a set timeframe (typically 30-60 days).
Documentation
What documents do I need to prepare?
Most lenders require:
• Proof of income (W-2s, Paystubs)
• Proof of assets (Bank statements)
• Credit history verification
• Identification (Photo ID)
• Documentation of existing debts.