Frequently Asked Questions

Mortgages have a lot of moving pieces.
Explore answers to some of the most frequently asked questions in the mortgage industry.

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Mortgages

Will applying for a mortgage affect my credit?

Before you enter the mortgage process, your Loan Officer will need to run your credit to confirm your eligibility. To let you explore your loan options with no impact to your credit score, we will conduct a soft credit inquiry.

After we explore your loan options together, you give us your intent to proceed with the loan and collect your loan documents, a hard credit pull will be done, which impacts your credit score slightly. Multiple hard credit inquiries made within a 30-day period will only count as one inquiry.

You don’t need perfect credit for a mortgage refinance. If you received an offer letter from us stating that you’re pre-approved, then your credit at the time we sent you the letter met our minimum credit requirements. Please note that we will still have to order a full credit report, income, credit, employment history, and any other financial factors.

Your fees and closing costs costs will be presented with your loan options from the start, so there are no surprises. Closing costs and fees may be rolled into your loan.

What goes into a monthly mortgage payment?
A monthly mortgage payment includes several components often referred to as PITI: principal, interest, taxes, and insurance. Any condo fees or homeowners association fees may also be factored into a monthly payment.
What if I don’t have perfect credit?

You don’t need perfect credit for a mortgage refinance. If you received an offer letter from us stating that you’re pre-approved, then your credit at the time we sent you the letter met our minimum credit requirements. Please note that we will still have to order a full credit report, income, credit, employment history, and any other financial factors.

What documents do I need to apply for a mortgage?
For official mortgage approval, you will need to provide:
• Paystubs from the last 30 days
• W-2 forms from the last 2 years
• Tax returns from the last 2 years
• If other documents are needed for your unique situation, your Loan Officer will reach out and walk you through the additional requirements.
Are there any application fees?
When you work with us, there is no mortgage application fee. There is no cost or obligation to find out which programs and terms you are pre-approved for or will qualify for.
What are closing costs?

Your fees and closing costs costs will be presented with your loan options from the start, so there are no surprises. Closing costs and fees may be rolled into your loan. When applying for a loan, you’ll receive a Loan Estimate outlining these settlement charges for added fees like loan origination, appraisal, credit report, title insurance, document preparation, prepaid interest, and other miscellaneous fees.

Pre-Qualification

If I receive an offer letter, am I already approved or qualified for a loan?

 If your letter states you are pre-approved or pre-qualified for a loan, then you have already passed our initial criteria for obtaining a loan. To receive a mortgage, we must still verify your income, credit, employment history, and any other financial factors.

How do you pre-approve and pre-qualify people?

We have certain loan program specified criteria—like a minimum credit score—and ask a consumer reporting company for a list of people in the company’s database who meet the criteria.

What are the benefits of getting pre-qualified

Getting pre-qualified for a mortgage is a great first step to kickstart your homebuying journey. Pre-qualification gives you a picture of how much you may afford based on your credit, income, and debt. It helps you determine your budget, understand estimated monthly payments, explore loan programs, strengthen your offer, and save time.

Did you pull my credit to get my information?
No, we did not pull your credit, and we don’t have a copy of your credit report. We buy credit report data from third-party credit companies, and mortgage information is public record. We use these tools to determine your pre-approved loan amount.
How do you pre-approve and pre-qualify people?
We have certain legally specified criteria—like a minimum credit score—and ask a consumer reporting company for a list of people in the company’s database who meet the criteria.

Refinancing

What closing costs are involved in refinancing?

Refinance costs and fees pay for the processing of your loan. They can vary, depending on the loan type, property location, title company, and more. These costs can include: an origination fee, an underwriting/processing fee, title insurance, a title attorney fee, an upfront funding fee (VA loans), upfront mortgage insurance (for FHA loans), and more. Your fees and closing costs costs will be presented with your loan options from the start, so there are no surprises. Closing costs and fees are typically rolled into your loan, so you don’t have to pay anything upfront.

How much cash will I need to refinance my home?
There are no out-of-pocket expenses prior to your refinance loan closing. The rest of the fees and closing costs associated with your new loan can be financed into the loan amount, so you don’t have to pay anything upfront.
What is loan-to-value (LTV) and how is it calculated?
Your loan-to-value ratio (LTV) is the percentage of your property that is being financed. For example, if your home value is $100,000 and you obtain a mortgage of $80,000, your LTV is 80%. Lenders have limitations on how much you can borrow against your property. Typically, lenders consider loans with higher LTVs high-risk loans. As a result, most lenders will add private mortgage insurance (PMI) payments onto a loan until it reaches an LTV of 80%.
How long will my refinance take to process, and when will I receive my money?

Typically, refinance loans take around 30 to 60 business days to close. You’ll receive your funds within 7 business days from the date you close. The above are estimates, not a guarantee. Turn times may vary as each loan is unique.

Can I stop making payments on my bills?

No, keep making your monthly payments on time while we process your refinance loan. Missing a payment can adversely affect your credit score and impact your loan eligibility. If you have special circumstances, please contact your Loan Officer at 877-878-0100.

Do you refinance manufactured or mobile homes?
Yes! We do offer refinances for manufactured and mobile homes.
Can I still refinance if I don’t have perfect credit?

Yes. Most loans require a minimum credit score, but we may be able to help homeowners with scores as low as 580  to qualify. If you have a lower credit score, please be aware your options may be more limited.

Home Purchase

What do I need to buy a home?

First, you need a minimum credit score of 580 or more to qualify for most loan programs. Second, you need two years of consistent employment history, and you need to have been at the same company for at least 6 months. Third, you need to have money saved to make a down payment on a home and pay closing costs. NOTE: Veterans or active servicemembers eligible for VA benefits may qualify for a loan that requires a No down payment.

How much should I expect to pay for a down payment and other mortgage costs?

Loans require anywhere from a 3.5% down payment to a 20% down payment, depending on the loan type you qualify for.  Closing costs and lending fees may depend on the state and local taxes, municipal recording fees, and other costs associated with the home you buy.

Are there any tax* breaks or benefits involved with purchasing a home?

In some states, you may be able to write-off a number of costs when you buy a home, including: some mortgage interest, property taxes, private mortgage insurance (PMI) payments/fees, and more. Supreme Lending is not a licensed CPA or Tax consultant and therefore, cannot determine if your mortgage interest will be eligible as a tax deduction per IRS code. You are advised to contact a tax professional. This in no way implies you are guaranteed a tax credit. Consult your tax advisor regarding deductibility of interest. This is no way implies you are guaranteed a tax credit.

VA Home Purchases

How do I know if I qualify for a VA mortgage?
Active-duty service members, Veterans, National Guard members, Reserve members, and certain surviving spouses may qualify for Veterans benefits. If you are unsure of your VA eligibility, visit the Veterans Benefits Administration page to learn more or call us at 877-878-0100 to speak with a Loan Officer.
Can I have a co-signer/co-borrower with a VA mortgage?
Yes, as long as the VA-eligible individual is listed as the primary borrower, you can have a co-signer/co-borrower.
What is the minimum down payment I can make?
VA home loans do not require a down payment as long as the sales price isn’t higher than the home’s appraised value. That means 100% of your loan can be financed, without paying private mortgage insurance (PMI).
Can I use my VA benefits to purchase a home if I’ve used my VA benefits before?

Yes. You can use your VA benefits again, but you may have to pay the VA funding fee.