Top Mortgage Questions Answered: 2025 Home Financing Guide

Whether you’re a first-time homebuyer or considering refinancing, navigating the mortgage world can feel overwhelming. With so many loan options, terms, and financial factors to consider, it’s natural to have questions. NOVA® Home Loans is here to make it easier!

Below, we answer the most frequently asked mortgage questions to help you move forward with clarity and confidence.

What is the first step in getting a mortgage? 

The first step is getting pre-approved for a mortgage. This involves submitting financial information so a Loan Officer can determine how much you’re eligible to borrow.

Pre-approval helps in two key ways:

1. Sets your budget – You’ll know how much home you can afford, making your search more focused.
2. Strengthens your offer – Sellers see you as a serious buyer, which can give you an edge in competitive markets.

NOVA Home Loans makes pre-approval fast and easy, so you can start house hunting with confidence.

How much of a down payment do I need? 

Your required down payment depends on the type of home loan you choose. Here’s a quick breakdown of common mortgage options:

• FHA Loans – Minimum down payment of 3.5% for qualified buyers.
• VA and USDA Loans – 0% down for eligible borrowers, with no mortgage insurance.
• Conventional Loans – Often as low as 3% to 5%, though a larger down payment can reduce your monthly mortgage payment and eliminate Private Mortgage Insurance (PMI).

NOVA Home Loans offers a variety of loan programs to match your financial situation, and we’ll help you determine the best fit based on your goals.

What credit score do I need to qualify for a mortgage? 

The minimum credit score needed to qualify for a mortgage depends on the loan type, but in general, a higher score improves your chances of approval and may qualify you for lower interest rates.

Most FHA loans accept scores as low as 550, while conventional loans, VA loans, and USDA loans typically require a score of 620 or higher. However, other factors like income, debt, and employment history also play a role.

At NOVA Home Loans, we assess your full financial picture and help you find the best mortgage options for your credit profile.

How is my mortgage rate determined? 

Your mortgage interest rate is based on a combination of personal and market factors. We look at your full financial profile and the details of your loan. Key factors include:

• Credit score – Higher scores typically qualify for better rates.
• Loan type – FHA, VA, conventional, and other loan programs offer different rate structures.
• Down payment – A larger down payment can lead to lower rates.
• Occupancy type – Rates differ for primary residences, second homes, and investment properties.
• Loan term – Shorter terms (like 15 years) usually have lower rates than 30-year loans.
• Current market conditions – Rates fluctuate based on the broader economy and Federal Reserve policy.

At NOVA Home Loans, we shop rates and match you with the most competitive option for your situation.

What documents do I need to apply for a mortgage? 

When you apply for a mortgage, you’ll need to provide documentation that verifies your income, assets, and identity. We typically ask for recent pay stubs, W-2s, or 1099s from the past two years, bank statements, a form of identification, and proof of any additional assets. Having these documents ready can help speed up the approval process and reduce delays.

What’s the difference between pre-qualification and pre-approval?

Pre-qualification is an informal estimate of what you might be able to borrow, based on self-reported financial details. It’s useful for getting a general sense of your budget, but it doesn’t involve a credit check or documentation review.

Pre-approval, on the other hand, is a more in-depth process. We verify your credit, income, and assets, resulting in a conditional commitment for a loan amount. Pre-approval carries more weight with sellers because it shows you’re financially prepared and serious about buying.

How long does it take to close on a mortgage? 

The average time to close on a mortgage within 30 days from the date your offer is accepted. However, this timeline can vary depending on several factors, including the home inspection, appraisal process, and the speed of underwriting and documentation review. Staying responsive and organized throughout the process can help avoid delays and keep things moving smoothly.

What types of mortgages are available? 

There are several types of home loans, each designed to fit different financial situations:

• Conventional Loans – Ideal for borrowers with strong credit and a stable income.
• FHA Loans – Designed for those with lower credit scores or smaller down payments.
• VA Loans – Exclusive to eligible veterans, active-duty service members, and surviving spouses, with no down payment required.
• USDA Loans – For buyers in qualifying rural areas, often with no down payment.
• Jumbo Loans – For high-value properties that exceed conforming loan limits.
• Portfolio Loans – Provide more flexible qualification criteria.
• Home Equity Loans – Let you borrow against the equity in your current home.

The right mortgage depends on your credit, income, location, and long-term plans.

What are closing costs, and how much should I expect? 

Closing costs are the fees and expenses paid at the end of the homebuying process to finalize your loan and transfer property ownership. They typically range from 2% to 5% of the home’s purchase price.

These costs may include:

• Appraisal and inspection fees
• Title search and title insurance
• Loan origination fees
• Escrows for property taxes and homeowners’ insurance

Sometimes, you can negotiate for the seller to cover a portion of these expenses as part of your purchase agreement.

Should I choose a fixed-rate or adjustable-rate mortgage (ARM)?

It depends on your financial goals and how long you plan to stay in the home.

• A fixed-rate mortgage keeps your interest rate and monthly principal and interest payment the same for the entire loan term. It’s a smart choice if you value stability and plan to stay long-term.
• An adjustable-rate mortgage (ARM) starts with a lower interest rate that adjusts periodically after an initial fixed period. It may be a good option if you expect to move or refinance before the rate changes.

Both options have pros and cons, and the right choice comes down to what fits your situation best.

NOVA Home Loans Is Here To Guide You Through The Mortgage Process

Mortgages can seem complicated, but the right information makes all the difference. Whether you’re buying your first home, upgrading, or refinancing, working with NOVA can simplify the process and help you find the perfect loan solution.

Still have questions? Connect with the experts at NOVA today. We’ll walk you through every step with clarity, confidence, and personalized guidance.