Question 1

What is the minimum credit score to qualify for a home loan?

Accepted Answer

It depends on the loan type. Conventional loans typically require a 620+ score, FHA loans allow as low as 580 (or 500 with 10% down), VA loans have no official minimum but lenders typically look for 620+, and USDA loans generally require a 640+. Hard money and DSCR loans are more flexible and may approve borrowers with lower scores since they focus on the asset or rental income.

Question 2

How much down payment do I need for a residential loan?

Accepted Answer

Down payment requirements vary: Conventional loans require 3–20%, FHA loans require as little as 3.5%, VA and USDA loans offer 0% down for eligible borrowers, and Jumbo loans typically require 10–20%. For investment properties, expect 15–25% down depending on the loan program.

Question 3

What is the difference between a fixed-rate and adjustable-rate mortgage?

Accepted Answer

A fixed-rate mortgage locks your interest rate for the life of the loan, giving you predictable monthly payments. An adjustable-rate mortgage (ARM) starts with a fixed rate for an initial period (e.g., 5, 7, or 10 years), then adjusts periodically based on a market index. ARMs can offer lower initial rates but carry more long-term risk if rates rise.

Question 4

How long does it take to get approved for a home loan?

Accepted Answer

Pre-approval can happen in as little as 24–48 hours after submitting your application and documents. Full loan approval and closing typically takes 21–45 days for conventional/FHA/VA loans. Hard money and bridge loans can close in as few as 7–14 days.

Question 5

What documents do I need to apply for a residential mortgage?

Accepted Answer

You will generally need a government-issued ID, Social Security Number, last 2 years of W-2s or tax returns, recent pay stubs, 2–3 months of bank statements, and a signed purchase agreement. Self-employed borrowers will also need business tax returns and a year-to-date P&L. Visit our Required Documents page for a full checklist by loan type.

Question 6

Can I get a loan if I am self-employed?

Accepted Answer

Yes. Self-employed borrowers can qualify using 2 years of personal and business tax returns, a CPA-prepared P&L statement, and bank statements. Bank statement loans allow qualification based on 12–24 months of deposits rather than tax returns — ideal for borrowers who write off significant business expenses.

Question 7

What is PMI and how can I avoid it?

Accepted Answer

Private Mortgage Insurance (PMI) is required on conventional loans when you put less than 20% down. It protects the lender if you default. You can avoid PMI by putting 20%+ down, using a VA or USDA loan (which have no PMI), or using a piggyback loan (80/10/10 structure). PMI is automatically cancelled once you reach 20% equity.

Question 8

What is a DSCR loan and who is it for?

Accepted Answer

A DSCR (Debt Service Coverage Ratio) loan qualifies borrowers based on the rental income of the property rather than personal income. If the property generates enough rent to cover the mortgage (typically a DSCR of 1.0–1.25x or higher), you can qualify without W-2s or tax returns. It is ideal for real estate investors and landlords who want to scale their portfolio.

Question 9

Can I refinance my existing mortgage?

Accepted Answer

Yes. Refinancing replaces your current loan with a new one — often to lower your rate, reduce monthly payments, shorten your loan term, or pull out equity (cash-out refinance). We offer rate-and-term refinances, cash-out refinances, and DSCR refinances for investment properties.

Question 10

What is a jumbo loan?

Accepted Answer

A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac ($766,550 in most areas for 2024, higher in high-cost markets). Jumbo loans are used for luxury homes and high-value properties. They typically require higher credit scores, larger down payments (10–20%), and more reserves.

Question 11

What types of commercial properties can be financed?

Accepted Answer

We finance a wide range of commercial property types including multi-family apartments (5+ units), office buildings, retail centers, industrial warehouses, self-storage facilities, mixed-use properties, mobile home parks, and hospitality (hotels/motels). Each property type has specific underwriting criteria.

Question 12

How are commercial loans different from residential mortgages?

Accepted Answer

Commercial loans are underwritten primarily on the property's income (Net Operating Income or NOI) and DSCR rather than just the borrower's personal income. They typically have shorter terms (5, 7, or 10 years) with amortization over 20–30 years, may include balloon payments, and often require a personal guarantee from the principals.

Question 13

What is LTV and how does it affect my commercial loan?

Accepted Answer

Loan-to-Value (LTV) is the ratio of the loan amount to the property's appraised value. Most commercial loans allow 65–80% LTV. A lower LTV means less risk for the lender and may result in better rates. Lenders also use LTC (Loan-to-Cost) for construction and rehab projects.

Question 14

What is a bridge loan and when should I use one?

Accepted Answer

A bridge loan is a short-term loan (typically 6–24 months) used to "bridge" a gap in financing — for example, to acquire a property quickly before securing long-term financing, to fund renovations before refinancing, or to purchase a new property before selling an existing one. Bridge loans close fast but carry higher interest rates than permanent financing.

Question 15

What is a hard money loan?

Accepted Answer

A hard money loan is a short-term, asset-based loan secured by real estate. Approval is based primarily on the value of the property (the "hard" asset) rather than the borrower's credit or income. Hard money loans are commonly used by investors for fix-and-flip projects, bridge financing, and acquisitions that need to close quickly. They have higher rates but faster closings (often 7–14 days).

Question 16

What is a fix and flip loan?

Accepted Answer

A fix and flip loan is a short-term loan designed for investors who buy distressed properties, renovate them, and sell for profit. These loans fund both the purchase price and the renovation costs (up to 90% of purchase and 100% of rehab in some cases). They are typically 6–18 months in duration and based on the After-Repair Value (ARV) of the property.

Question 17

What is a construction loan and how does it work?

Accepted Answer

A construction loan funds the building of a new property or major renovation. Unlike a traditional mortgage, funds are disbursed in draws as construction milestones are completed. Once construction is finished, the loan is either paid off via a sale or refinanced into permanent financing (a construction-to-permanent loan). Lenders typically require licensed contractors, approved plans, and a detailed budget.

Question 18

Do I need a personal guarantee for a commercial loan?

Accepted Answer

Most traditional commercial loans require a personal guarantee from the principal borrowers, meaning you are personally liable if the property cannot service the debt. Some non-recourse loan structures are available for stabilized, income-producing properties at lower LTVs — typically reserved for larger, institutional-quality assets. DSCR loans in an LLC may offer limited personal guarantee options.

Question 19

How long does it take to close a commercial loan?

Accepted Answer

Commercial loan timelines vary by loan type. Hard money and bridge loans can close in 7–14 days. DSCR and bank statement loans typically close in 21–30 days. SBA loans and conventional commercial mortgages may take 45–90 days due to additional underwriting and government processing requirements.

Question 20

Can I buy commercial property in an LLC?

Accepted Answer

Yes, and it is highly recommended for liability protection. We work with borrowers purchasing in LLCs, LPs, corporations, and other entities. Some loan programs (like DSCR loans) are specifically designed for entity borrowers. You will need to provide entity formation documents, operating agreements, and an EIN. Some programs may still require a personal guarantee from the managing member.

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