Answers
Thirty answers, grouped by stage
The questions that actually arrive, answered at the length they deserve rather than in a sentence.
01
Working with a broker
What actually changes when the person arranging your loan does not work for the lender.
A bank loan officer sells one rulebook and one price sheet. A broker takes your file to a panel of wholesale lenders and places it where the guidelines and the pricing fit best. When a file has a complication, the broker can move it; the bank officer can only decline it.
On roughly four out of five of my files the wholesale lender pays my compensation out of the rate, and you pay no origination charge at all. On the rest, you pay it directly and the rate sheet is quoted without it. The compensation percentage is fixed in advance and cannot change by borrower or by programme.
No. I pull credit once and use that single report across the panel. Beyond that, the scoring models treat multiple mortgage enquiries inside a 45-day window as one event, so even a second pull elsewhere does not compound.
The wholesale lender does. I prepare and present the file, but the underwriting decision belongs to the lender whose money it is. You are entitled to know which lender that is, and it is on every disclosure you sign.
Sometimes the original lender, often a servicer they sell to. Servicing transfers are routine and governed by federal notice requirements. Your rate, term and balance do not change when one happens.
Send the loan estimate rather than the rate. Section A tells me what the lender is actually charging, and section E tells me what the state is charging. Comparing complete loan estimates is the only honest comparison.
02
Getting approved
Credit, income, documents and the difference between a letter and a real approval.
620 for most conventional programmes, 580 for FHA at 3.5% down, and no published VA minimum although most desks overlay at 580 to 620. The score that matters is your middle score of the three bureaus, or the lower middle score if there are two borrowers.
Zero on VA and USDA, 3% on conventional first-time buyer programmes, 3.5% on FHA. Down payment assistance can cover part of that. The bigger constraint for most Richmond buyers is closing costs, not the down payment itself.
Pre-qualification is arithmetic based on what you told me. Pre-approval means an underwriter has reviewed your actual income and asset documents. I only issue the second kind, because a listing agent in this market can tell the difference.
Two years of W-2s or tax returns, thirty days of pay stubs, two months of statements for every account you will use, photo identification, and for self-employed borrowers the complete business returns plus a year-to-date profit and loss statement.
Your total monthly debt payments, including the proposed housing payment, divided by your gross monthly income. Conventional generally runs to 45%, to 50% with strong reserves. FHA with an approve finding can reach into the mid fifties.
No, but the way they are counted matters. Conventional can use the actual payment on an income-driven plan when it is greater than zero. FHA uses the greater of the actual payment or 0.5% of the outstanding balance. That difference decides some files.
Sometimes. Fannie Mae permits a one-year analysis where the business has traded five years or more, you have a documented history in the same line of work and the automated finding allows it. Fewer than two years with no prior history in the field is very difficult.
FHA is two years from a Chapter 7 discharge. Conventional is four years, or two with documented extenuating circumstances. Foreclosure seasoning is longer, at seven years conventional and three years FHA.
03
Rates, locks and costs
How pricing is actually built, and where the money goes.
Lock when a rate move against you would break the purchase. Locking is a risk decision, not a prediction. Choose a term that reaches your real settlement date with a margin, because extensions run about 0.03 points per day and a blown lock re-prices at the worse of the two markets.
An option most wholesale desks offer once per loan. If the market improves by at least 0.250% after you lock, you can take the better rate for a fee of around 0.125 points. It normally has to be exercised at least seven days before closing and after the file leaves underwriting.
The annual percentage rate folds the finance charges into a single yearly figure, so a loan with points and fees shows a higher APR than its note rate. It is useful for comparing two loans of the same type and term, and misleading for anything else.
It depends entirely on how long you keep the loan. A point costs 1% of the loan amount and typically buys about 0.250% in rate. Divide the cost by the monthly saving to get the break-even month, then compare that honestly against your plans.
In the Richmond market, roughly $3,200 to $5,400 on a refinance and more on a purchase once title insurance and Virginia recordation tax are included. Those are sample ranges; your loan estimate gives the real figures on page two.
Yes, within limits set by programme and by loan-to-value. FHA allows up to 6% of the price. Conventional runs from 3% to 9% depending on occupancy and down payment. VA has its own concession rules.
04
Property, appraisal and closing
From ratified contract to the keys.
The lender lends against the lower of the contract price or the appraised value, so your loan shrinks and your cash rises by the shortfall. From there you can renegotiate, cover the gap in cash, request a reconsideration of value, or use the appraisal contingency to exit.
A formal request that the appraiser reconsider, supported by comparable sales they did not use and a written argument. It succeeds perhaps one time in four and takes five to eight business days, so it is worth attempting only when genuinely better comparables exist.
Often, on rate and term refinances under 80% loan-to-value with clean automated findings, and sometimes on low loan-to-value purchases. It saves around $650 and about a week. Cash-out files almost never qualify.
My median from ratified contract to clear-to-close over the last twelve months is 22 days, which is a sample figure from my own pipeline. The three-business-day closing disclosure rule sits on top of that and cannot be waived.
Tell me first. A move within the same field at the same or higher pay is usually fine. A move to self-employment, to commission-only pay, or into a probationary period can stop the file entirely, sometimes on the day of closing.
Federal law requires that you receive the closing disclosure at least three business days before you sign. Certain changes restart that clock. It exists so that nobody sees their final numbers for the first time at the settlement table.
05
Gifts, assets and documentation
Where the money comes from, and how it has to be proved.
Yes. On a conventional primary residence purchase the entire down payment may be gifted by a relative, with no minimum contribution required from you. We need a signed gift letter and a full paper trail from the donor's account to the closing table.
The donor's name, address and phone, their relationship to you, the exact amount, the transfer date, the property address, an explicit statement that no repayment is expected, and both signatures. A missing relationship line is the most common reason one comes back.
Physical currency cannot be sourced to an origin, so no agency programme accepts it at any amount. If you have been saving cash at home, deposit it and let it season in the account for at least sixty days before you begin, or it simply will not count.
Generally any single deposit exceeding half of your monthly qualifying income. Transfers between your own accounts are easy to explain. Unexplained deposits are the most common reason a file stalls in underwriting.
Funds that have sat through a full sixty-day statement period are considered seasoned and need no explanation. Anything newer needs sourcing, which means showing where it came from and that it was not borrowed.
Only after liquidating to US dollars and seasoning the proceeds in a bank account. You will need the exchange statement showing the sale and the transfer record showing the funds arriving.
Still not answered
Call and ask. If the answer takes more than a sentence it probably belongs on this page, and it will end up here.
Three wholesale quotes on the same day's pricing, before you choose.