Question 1

With rates above 7%, should I choose an ARM, a rate buydown, or a 30-year fixed?

Accepted Answer

It depends on how long you'll keep the loan and how much payment change you can handle. A 30-year fixed gives you certainty. An ARM gives you a lower rate for the first 5, 7, or 10 years, then it adjusts. A temporary buydown lowers your payment for the first year or two, usually paid for by a seller or builder. At The Mortgage Advisory, we lay out the full cost of each, side by side, before you choose.

Question 2

Are there down payment assistance programs in California, Texas, Florida, or Colorado?

Accepted Answer

Yes. All four states have state housing agency programs that help with the down payment and closing costs, either as a grant or as a low- or no-payment second loan: CalHFA in California, TDHCA and TSAHC in Texas, Florida Housing in Florida, and CHFA in Colorado. Most have income and price limits and require a homebuyer class. At The Mortgage Advisory, we'll tell you straight whether a program actually saves you money compared with a regular loan.

Question 3

How much house can I afford?

Accepted Answer

Work backward from a monthly payment you're comfortable with, not the maximum a lender approves. A common starting point is keeping your total housing payment (principal, interest, taxes, insurance, HOA, and mortgage insurance) around 28% to 31% of your gross monthly income, and all your debts together under about 36% to 43%. At The Mortgage Advisory, we show you both numbers, what you qualify for and what you can live with, before you ever make an offer.

Question 4

How do I choose a mortgage lender, and should I just use the one my agent recommends?

Accepted Answer

Get two or three Loan Estimates for the same loan on the same day, compare the total cost (not just the rate), and pay attention to who explains things clearly and answers the phone. Your agent's recommendation is a fine place to start, but it isn't the only option. At The Mortgage Advisory, we're happy to be one of the quotes you compare, and we'll tell you upfront who your lender is and how we're paid.

Question 5

How do I know if my mortgage rate and Loan Estimate are a good deal?

Accepted Answer

Don't judge it by the rate alone. Check whether the rate is locked (page 1), what you're paying for that rate in points and fees (page 2), and the 5-year cost (page 3). Then compare two or three Loan Estimates for the same loan, pulled on the same day. At The Mortgage Advisory, we'll walk you through any Loan Estimate line by line, even one from another lender.

Question 6

How do I find a lender that really knows VA loans?

Accepted Answer

Interview them. Ask how many VA loans they close, how they handle your Certificate of Eligibility, VA appraisals, the funding fee exemption, and seller concessions, then compare two or three VA Loan Estimates from the same day. The Mortgage Advisory is a direct VA lender in California, Texas, and Colorado (a licensed mortgage broker in Florida), and we genuinely encourage veterans to compare us.

Question 7

What is the VA funding fee, and who is exempt from paying it?

Accepted Answer

The VA funding fee is a one-time charge that keeps the VA loan program running in place of monthly mortgage insurance. On a purchase, it's 2.15% of the loan for first use with less than 5% down, lower with more down, and 3.3% on later use with less than 5% down. Veterans receiving VA disability compensation, some Purple Heart recipients, and surviving spouses receiving DIC are exempt. The Mortgage Advisory shows the fee, or your exemption, on your Loan Estimate.

Question 8

How does assuming a VA loan work, and can a non-veteran assume it?

Accepted Answer

Yes, a non-veteran can assume a VA loan, keeping the seller's rate and balance, as long as they qualify with the loan servicer. The buyer has to cover the difference between the price and the loan balance, in cash or with a second loan, and pays a 0.5% VA funding fee. If the buyer isn't a veteran who substitutes their own entitlement, the seller's VA entitlement stays tied to the loan. The Mortgage Advisory helps both sides run the numbers.

Question 9

What credit score do I need for a VA loan, and can I qualify after collections or bankruptcy?

Accepted Answer

VA doesn't set a minimum credit score; each lender sets its own, often somewhere around 580 to 620. After bankruptcy, VA generally looks for 2 years since a Chapter 7 discharge, or 12 months of on-time Chapter 13 plan payments with the trustee's permission. Collections don't automatically disqualify you. At The Mortgage Advisory, we look at your whole credit story, not just the score.

Question 10

Am I eligible for a VA loan, and how do I get my Certificate of Eligibility (COE)?

Accepted Answer

You're generally eligible if you've served 90 continuous days on active duty, if you're a veteran who served 24 continuous months (or the full period you were called up, at least 90 days), or after 6 creditable years in the Guard or Reserve, with a discharge that isn't dishonorable. Some surviving spouses qualify too. Your Certificate of Eligibility (COE) proves it, and The Mortgage Advisory can usually pull it online for you in minutes.

Question 11

How do I know if my VA loan rate and Loan Estimate are a good deal?

Accepted Answer

Read it like any Loan Estimate, then check the VA-specific items: the funding fee (and whether you're exempt), no monthly mortgage insurance, what you're paying in points or a flat lender fee, and how seller concessions are applied. At The Mortgage Advisory, we help veterans compare VA offers side by side, same day, same loan.

Question 12

Can I use a VA loan to build a home or buy new construction?

Accepted Answer

Yes. You can use your VA loan to buy a brand-new home from a builder, and some lenders offer VA construction-to-permanent loans to build one. There are a few extra steps (a builder VA can work with, a VA appraisal, and inspection and warranty requirements), so work with someone who does VA new construction regularly. At The Mortgage Advisory, we'll put your builder's incentive package side by side with an outside VA offer so you can see which one really costs less.

Question 13

What is a VA streamline refinance (IRRRL), and do I qualify?

Accepted Answer

A VA IRRRL is a streamlined refinance that lowers the rate on your existing VA loan, usually with no appraisal and less paperwork. You generally qualify if you already have a VA loan, you've made at least six payments, and the new loan gives you a real benefit, with costs recouped within 36 months. The Mortgage Advisory is a direct VA lender offering IRRRLs in California, Texas, and Colorado, and arranges them in Florida as a licensed mortgage broker.

Question 14

Why do sellers turn down VA offers, and how can I make my VA offer stronger?

Accepted Answer

Mostly because of outdated myths: that VA loans close slowly, that VA appraisals are harsh, or that the seller has to pay extra fees. Today VA loans close in about the same time as conventional loans, and the appraisal standards are mostly common sense. A strong pre-approval, a lender who calls the listing agent, and smart contract terms make a VA offer compete. The Mortgage Advisory is a direct VA lender and makes that call for you.

Question 15

What credit score do I need to buy a house, and can I buy with bad credit?

Accepted Answer

It depends on the loan. FHA allows a score as low as 580 with 3.5% down (500 to 579 with 10% down), most conventional lenders look for about 620 or higher, and VA doesn't set a minimum, though lenders usually do. A lower score doesn't always mean no, but it usually means a higher cost. The Mortgage Advisory reviews your credit with you and shows you which loan fits and what raising your score could save.

Question 16

How strict are FHA appraisal and property requirements, and could they kill my deal?

Accepted Answer

FHA appraisals are a little stricter than conventional ones: the appraiser checks that the home is safe, sound, and secure, and flags things like peeling paint on older homes, a failing roof, or broken utilities. Most items are small and can be fixed before closing, and they rarely kill a deal when they're caught early. The Mortgage Advisory helps buyers and their agents plan for FHA repairs before the offer, not after the appraisal.

Question 17

Can I get an FHA loan if I already own a home?

Accepted Answer

Sometimes. FHA loans are for the home you'll live in, and you can generally have only one FHA loan at a time. But FHA makes exceptions, like relocating for a job too far to commute, needing more room for a growing family, or moving out of a home you co-own with someone who's staying. You don't have to be a first-time buyer. The Mortgage Advisory reviews your situation and arranges FHA loans through approved partner lenders.

Question 18

How do I refinance from an FHA loan to a conventional loan, and is it worth it?

Accepted Answer

You refinance into a new conventional loan that pays off the FHA loan. It's usually worth it when you have about 20% equity, because conventional loans don't need mortgage insurance at that point, and your credit has improved. The math has to beat the closing costs, especially if your current rate is low. The Mortgage Advisory is the direct lender on conventional loans in California, Texas, and Colorado and runs the break-even for you.

Question 19

FHA or conventional: which is better when I have a small down payment?

Accepted Answer

It mostly comes down to your credit score. FHA needs just 3.5% down and is forgiving on credit, but its mortgage insurance usually lasts for the life of the loan. Conventional needs as little as 3% down for first-time buyers, and its PMI gets cheaper with a higher score and can be removed later. The Mortgage Advisory prices both side by side so you can see the real monthly and long-term cost.

Question 20

Can family help with my down payment, and how do gift funds work?

Accepted Answer

Yes. FHA, VA, and conventional loans all allow down payment gifts from family members, and some allow gifts from others close to you. You'll need a signed gift letter saying it isn't a loan, plus a paper trail showing the money moving from the giver to you. If you're buying from a family member, a gift of equity can count as your down payment. The Mortgage Advisory walks you and your family through it before any money moves.

Question 21

How much should a first-time buyer put down, and do I really need 20%?

Accepted Answer

No, you don't need 20%. Eligible veterans can put 0% down with a VA loan, first-time buyers can put 3% down on a conventional loan, and FHA needs 3.5%. Putting 20% down only avoids mortgage insurance on a conventional loan. The right amount depends on keeping enough cash for emergencies and closing costs. The Mortgage Advisory shows you the monthly payment and cash needed at several down payment levels.

Question 22

How do I get rid of FHA mortgage insurance?

Accepted Answer

It depends on your down payment. For most FHA loans since mid-2013, if you put less than 10% down, the mortgage insurance lasts for the life of the loan; with 10% or more down, it ends after 11 years. The most common way out is refinancing into a conventional loan once you have about 20% equity, and The Mortgage Advisory will show you when that makes sense.

Question 23

I got a mailer offering a very low refinance rate. Is it real, and how do I spot hidden points?

Accepted Answer

Sometimes the rate is real, but it usually comes with strings: upfront points, an adjustable rate, or assumptions like perfect credit and lots of equity. Look at the APR, the points, and the fine print, and ask for a Loan Estimate to compare. The Mortgage Advisory will look over any mailer or quote with you and show you what it really costs.

Question 24

What is a no-closing-cost refinance, and is it really free?

Accepted Answer

No. In a no-closing-cost refinance, the lender covers your costs in exchange for a slightly higher interest rate, or the costs get added to your loan balance. It can be a smart move if you might sell or refinance again within a few years. The Mortgage Advisory shows you the no-cost and standard options side by side so you can see which one costs less over your time in the home.

Question 25

When is refinancing worth it, and how much lower does my rate need to be?

Accepted Answer

There's no magic rate drop. A refinance is worth it when the monthly savings pay back your closing costs well before you'd sell or refinance again, usually within two to three years. At The Mortgage Advisory, we give you the break-even month in writing and tell you to wait if the math doesn't work.

Question 26

What credit score and debt-to-income ratio do I need for a HELOC?

Accepted Answer

Requirements vary by program, but many HELOCs look for a credit score in the mid-600s or higher, a debt-to-income ratio under roughly 45% to 50%, and total mortgage debt at or below about 80% of your home's value. Better credit gets better pricing. The Mortgage Advisory will tell you honestly where you stand, and which program fits, before anyone does a hard credit pull.

Question 27

Should I use a HELOC to pay for home improvements like a renovation, new roof, or ADU?

Accepted Answer

Often, yes. For homeowners with equity and a low first-mortgage rate, a HELOC is usually one of the lowest-cost ways to pay for a renovation, a new roof, or an ADU, and the interest may be tax-deductible when the money improves your home. Just know the home is valued as it is today, not after the work. The Mortgage Advisory helps homeowners in California, Texas, Florida, and Colorado size the line to the real project budget.

Question 28

Should I use a HELOC instead of pulling money from my 401(k) or investments?

Accepted Answer

Often, yes. Pulling money from a 401(k) early can trigger income taxes, a 10% penalty if you're under 59½, and lost growth, while a HELOC keeps your retirement money invested. But a HELOC adds a monthly payment secured by your home. The Mortgage Advisory shows you the HELOC cost in dollars so you and your tax or financial advisor can compare it with the true cost of cashing out.

Question 29

HELOC or cash-out refinance: which is better?

Accepted Answer

It depends on how much debt you're carrying and the interest tied to it, not just your mortgage rate. If your other debts are small, a HELOC usually wins because it leaves your low first mortgage alone. If you're carrying a lot of high-interest debt (credit cards, car loans, solar or PACE liens), a cash-out refinance can lower your Life Rate, the blended rate on everything you owe, even if your mortgage rate goes up. The Mortgage Advisory calculates your Life Rate both ways before you decide.

Question 30

What's the difference between a HELOC and a home equity loan?

Accepted Answer

Both are second mortgages that let you borrow against your equity without touching your first mortgage. A home equity loan gives you one lump sum with a fixed rate and payment; a HELOC is a line of credit you can draw from as needed. The HELOCs The Mortgage Advisory arranges blur the line: you can choose a fixed rate, and payments cover principal and interest from day one.

Question 31

Is a home equity investment (shared-equity agreement) better than a HELOC?

Accepted Answer

Usually not, if you can afford a monthly payment. A home equity investment (also called a shared-equity or home equity agreement) gives you cash now with no monthly payment, but you repay it with a share of your home's value later, which can cost far more than a HELOC if your home appreciates. The Mortgage Advisory will compare the likely payoff of each so you can see the real price.

Question 32

How does a HELOC work: draw period, repayment, and variable rate?

Accepted Answer

A HELOC is a line of credit backed by your home's equity. Traditional HELOCs have a variable rate and often interest-only payments at first, which can jump later. The HELOCs The Mortgage Advisory arranges let you choose a fixed or variable rate, with payments that pay down principal from day one, so there's no interest-only period that ends in a payment jump, and you keep your low-rate first mortgage exactly where it is.

Question 33

How much can I borrow with a HELOC?

Accepted Answer

Usually up to about 80% of your home's value, minus what you still owe on your mortgage. On a $600,000 home with $300,000 owed, that's up to about $180,000. Your credit, income, and the specific program set the final number. The Mortgage Advisory can give you a quick estimate on the homepage slider and a real number after a short review.

Question 34

HomeSafe Second (reverse mortgage second) vs. HELOC: which is better if I'm 55 or older?

Accepted Answer

Both let you keep your current first mortgage. A HELOC is usually a variable-rate line of credit with monthly payments and stricter credit and income rules. A reverse mortgage second, like HomeSafe Second from Finance of America, is a fixed-rate lump sum with no required monthly payment, for homeowners 55 and older (62 in Texas), with a minimum credit score around 640. The trade-off: its balance grows over time. The Mortgage Advisory arranges both and compares them with your real numbers.

Question 35

Is there any downside to opening a HELOC and keeping it unused as an emergency backup?

Accepted Answer

It can be a smart safety net, with a few catches: some HELOCs charge annual or inactivity fees, some require you to draw most of the line at closing, and lenders can freeze or reduce a line if your home's value or finances change. An open line with a zero balance usually doesn't count against your debt-to-income on most loans. The Mortgage Advisory will match you with a program built for a standby line if that's your goal.

Question 36

Why do some financial experts say you should never take out a HELOC?

Accepted Answer

Most warnings come from old-style HELOCs: variable rates, interest-only payments that jump later, and people borrowing against their homes for vacations or cars. Those risks are real. Newer HELOCs, including the ones The Mortgage Advisory arranges, let you choose a fixed rate with principal and interest from day one, which removes the payment-shock problem. The rule that still stands: borrow against your home only for things that improve your finances.

Question 37

Can I use my home equity to consolidate debt if I have bad credit or a high debt-to-income ratio?

Accepted Answer

Often, yes. Paying off your cards at closing removes those payments from your debt-to-income, which can be the very thing that helps you qualify. Depending on your score and age, an FHA cash-out refinance, a Non-QM loan, or a reverse mortgage option may work when a standard HELOC doesn't. The Mortgage Advisory will tell you honestly which path fits, and when to wait and rebuild first.

Question 38

I'm a homeowner with credit card debt. What are my options to pay it off?

Accepted Answer

As a homeowner, you have more options than most people: balance transfer cards, a personal loan, a debt management plan, and your home equity through a HELOC, home equity loan, cash-out refinance, or, if you're 62 or older, a reverse mortgage. At The Mortgage Advisory, we steer people toward the option that lowers their Life Rate, the blended rate on everything they owe, and their total cost.

Question 39

Should I use a personal loan or my home equity to pay off credit card debt?

Accepted Answer

It depends on the amount and your credit. A personal loan is fast and doesn't put your home at risk, but its rate is usually higher and its term shorter, so payments are bigger. Home equity usually costs less and spreads payments out, but your home secures it. For smaller balances with good credit, a personal loan can be the better call; for larger balances, home equity usually saves more, and The Mortgage Advisory will show you both honestly.

Question 40

Can I use a reverse mortgage to pay off my credit cards and other debts in retirement?

Accepted Answer

Yes. Homeowners 62 and older can use a reverse mortgage, or a reverse mortgage second that keeps their current first mortgage, to pay off credit cards, medical bills, and other debts, with no required monthly mortgage payment on the reverse loan. You still pay property taxes, insurance, and upkeep, and the balance grows over time. The Mortgage Advisory arranges both in California, Texas, Florida, and Colorado.

Question 41

What are the risks of turning credit card debt into debt secured by my home?

Accepted Answer

Three big ones: your home becomes collateral for what used to be unsecured debt, stretching it over a longer term can raise the total interest you pay, and running the cards back up leaves you with both debts. Each risk can be managed with a fixed payment, a set payoff date, and a plan for the cards. The Mortgage Advisory shows you the total cost, not just the lower monthly payment.

Question 42

What is my Life Rate, and why does it matter more than my mortgage rate?

Accepted Answer

Your Life Rate is the blended interest rate on everything you owe, including your mortgage, credit cards, car loans, and solar or PACE liens, weighted by how much you owe on each. Many homeowners are proud of a 3% mortgage while cards at 22% and liens at 11% quietly push their real cost of borrowing much higher. The Mortgage Advisory calculates your Life Rate for free and shows you how to lower it.

Question 43

Can you lose your home with a reverse mortgage?

Accepted Answer

Only if the loan terms aren't kept up: the last borrower moves out, property taxes or homeowners insurance go unpaid, or the home isn't maintained. At The Mortgage Advisory, we set up every reverse mortgage with those costs planned for from day one, so our clients can focus on enjoying their home.

Question 44

Is a reverse mortgage a scam?

Accepted Answer

No. Most reverse mortgages are Home Equity Conversion Mortgages (HECMs), insured by the FHA, and you meet with an independent HUD-approved counselor before you can even apply. At The Mortgage Advisory, we see them as a legitimate retirement tool that fits some homeowners really well and others not at all. The bad reputation comes from bad sales practices, not the loan.

Question 45

Can I get a reverse mortgage if my home is worth more than the FHA limit?

Accepted Answer

Yes. An FHA-insured HECM only counts your home's value up to $1,249,125 in 2026, so owners of higher-value homes often get more from a jumbo (proprietary) reverse mortgage, with loans up to about $4 million from some lenders in select states. Jumbo reverse mortgages aren't FHA-insured HECMs and have their own terms. The Mortgage Advisory compares both for your home.

Question 46

What are the alternatives to a reverse mortgage?

Accepted Answer

There are a dozen of them. You can defer property taxes through a state program, sell and downsize, buy a smaller home with a reverse mortgage for purchase, take a HELOC, home equity loan, or cash-out refinance, use a reverse mortgage second, rent out a room, or get help from family. Each trades something different: a monthly payment, your equity, or your home. The Mortgage Advisory walks you through all of them, including the ones we don't offer.

Question 47

What happens to a reverse mortgage if my parent moves into assisted living or a nursing home?

Accepted Answer

On an FHA-insured HECM, the loan usually comes due if the last borrower lives away from the home for more than 12 consecutive months for health reasons, like assisted living or a nursing home. If a co-borrower or an eligible non-borrowing spouse still lives there, the loan generally doesn't come due. The family can then sell, refinance, or keep the home, and The Mortgage Advisory helps them plan ahead.

Question 48

Can I get a reverse mortgage without paying off my current low-rate mortgage?

Accepted Answer

Yes, with a reverse mortgage second. A standard FHA-insured HECM has to pay off your current mortgage, but a second-lien reverse mortgage sits behind it, so you keep your low rate and your payment exactly as they are. The Mortgage Advisory offers reverse mortgage seconds for homeowners who want to tap their equity without giving up a great first-mortgage rate.

Question 49

How does a reverse mortgage line of credit grow, and how can I use it?

Accepted Answer

On an FHA-insured HECM, the part of your line of credit you don't use grows every year at the same rate as the loan balance: your interest rate plus the 0.5% annual FHA insurance premium. You never have to draw from it, draws aren't taxable income, and there's no monthly payment. The Mortgage Advisory helps retirees set one up early and keep it as a standby source of cash for emergencies, home care, or a down market.

Question 50

Does a reverse mortgage affect Medicaid, Social Security, or Medicare?

Accepted Answer

Social Security and Medicare aren't affected, because reverse mortgage money is loan proceeds, not income. Needs-based programs like Medicaid and SSI are different: money you draw isn't income in the month you get it, but whatever you keep into the next month can count as an asset. Drawing only what you need from a line of credit usually avoids the problem. The Mortgage Advisory will help you plan draws, and a benefits specialist can confirm your situation.

Question 51

Can a reverse mortgage pay me every month for life?

Accepted Answer

Yes. An FHA-insured HECM's tenure option pays you a set amount every month for as long as at least one borrower lives in the home as a primary residence, even if the loan balance grows past the home's value. That's why other countries call it a housing pension. The Mortgage Advisory helps you compare monthly payments, a line of credit, or a mix of both.

Question 52

Can I get a reverse mortgage if my spouse is under 62?

Accepted Answer

Yes. If you're 62 or older and your spouse is younger, your spouse can be named at closing as an eligible non-borrowing spouse on an FHA-insured HECM, which may let them stay in the home after you pass. The trade-off is that loan amounts are based on the younger spouse's age, so they're lower. The Mortgage Advisory structures the loan so both of you are protected.

Question 53

Is reverse mortgage money taxable, and can it help with taxes in retirement?

Accepted Answer

No, reverse mortgage money generally isn't taxable income, because it's loan proceeds. That can help in retirement: borrowing instead of selling may preserve your heirs' stepped-up basis, and draws don't count toward Medicare's income surcharges. They can also leave room for Roth conversions or help you delay Social Security. The Mortgage Advisory sets up the loan, and your CPA and financial advisor should model the tax side with you.

Question 54

Can I get a reverse mortgage if my home is in a trust?

Accepted Answer

Usually, yes. A revocable living trust is generally eligible for an FHA-insured HECM once the trust passes HUD's review, and the home can stay in the trust. Irrevocable trusts generally aren't eligible for a HECM, though some proprietary loans may allow them. The Mortgage Advisory works with your estate attorney so the loan fits your estate plan and your heirs know their options.

Question 55

What happens to a reverse mortgage when the borrower dies, and do the heirs have to pay it back?

Accepted Answer

The loan becomes due, but heirs don't pay it out of their own pockets. On an FHA-insured HECM, they can keep the home by paying off the loan for the lesser of the balance or 95% of the appraised value, sell it and keep any equity left over, or hand the keys back. They'll never owe more than the home is worth. The Mortgage Advisory walks families through these options before and after.

Question 56

Should I sell and downsize, or stay put with a reverse mortgage?

Accepted Answer

It comes down to whether this home still fits your life. Selling and downsizing frees up cash and cuts upkeep, but selling and moving often cost 8% to 10% of the home's value, plus leaving your neighborhood. A reverse mortgage lets you stay, but the balance grows. There's also a middle path: a reverse mortgage for purchase lets you buy a smaller home with no monthly mortgage payment. The Mortgage Advisory compares all three with your real numbers.

Question 57

Can seniors defer property taxes in California, Texas, Florida, or Colorado?

Accepted Answer

Yes. California, Texas, Florida, and Colorado each have a program that lets qualifying older homeowners put off paying property taxes, with the deferred amount plus interest repaid when the home is sold or ownership changes. Ages, income limits, and deadlines differ by state, and a mortgage or reverse mortgage can affect eligibility. The Mortgage Advisory helps homeowners compare tax deferral with other options before deciding.

Question 58

When is a reverse mortgage a bad idea?

Accepted Answer

A reverse mortgage may not be right if you're likely to move into assisted living or a nursing home soon, if it won't actually improve your cash flow for the rest of retirement, if you (or the person signing) don't fully understand the loan, or if leaving the home free and clear to your heirs is your top priority. The Mortgage Advisory walks through all four with you before recommending anything.

Question 59

Who qualifies for a reverse mortgage, and how much equity do I need?

Accepted Answer

For an FHA-insured HECM, every borrower must be 62 or older, the home must be your primary residence, and you need enough equity to pay off any current mortgage and still get a real benefit, often around half the home's value or more. You'll also complete HUD-approved counseling and a financial assessment. The Mortgage Advisory runs these numbers with you first, so you know whether it works before you apply.

Question 60

Does a bank statement loan cost more than a regular mortgage?

Accepted Answer

Usually, yes. Bank statement loans typically carry a higher rate than conventional loans and need a bigger down payment, often 10% to 20% or more. For self-employed borrowers whose tax returns don't show their real income, it's often still the right move, especially with a plan to refinance into a conventional loan later. The Mortgage Advisory is the direct lender on both, so we show you the real price difference side by side.

Question 61

Can I get a mortgage with less than two years of self-employment?

Accepted Answer

Often, yes. Many lenders will accept 12 to 24 months of self-employment if you worked in the same field before going out on your own, like a nurse who opens her own staffing business. Some Non-QM programs also work with a shorter history. The Mortgage Advisory will look at your full work history, not just your start date.

Question 62

What documents do self-employed borrowers need, and how is my income calculated?

Accepted Answer

For a regular loan, you'll usually need two years of personal (and business) tax returns, a year-to-date profit and loss, and bank statements. Your income is your net business income plus certain non-cash add-backs like depreciation, averaged over two years. The Mortgage Advisory reviews your returns before you apply, and if they don't show your real income, we can look at bank statement options instead.

Question 63

Can I get a mortgage if I'm self-employed?

Accepted Answer

Yes. Most self-employed borrowers qualify with a conventional loan using about two years of tax returns. If write-offs make your taxable income look too low, a Non-QM loan can use your bank statements, 1099s, or a rental property's income instead. The Mortgage Advisory is the direct lender on both conventional and Non-QM loans, so we can look at your business the way it really works.

Question 64

What is a DSCR loan, and how do I qualify for one?

Accepted Answer

A DSCR loan is for rental properties: you qualify based on whether the property's rent covers its payment, not on your personal income or tax returns. Most programs look for rent at or above the full monthly payment and ask for about 20% to 25% down. The Mortgage Advisory is the direct lender on DSCR loans in California, Texas, and Colorado (in Florida, we arrange them as a licensed mortgage broker), and we're upfront about the prepayment penalties that often come with them.

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