Frequently Asked Questions

This depends on the loan program you choose! Here is a break down of the down payment requirements for a few different loan programs: 

• VA: 0% 
• FHA: 3.5% 
• USDA: 0% 
• Conventional: 3% or 5% minimum depending on your situation, and up to however much you would like to put down in addition to the minimum requirement. 

Multiply the % by the purchase price of the home to calculate your minimum down payment requirement. 

If you’re having a difficult time saving for your down payment, there are programs available that may be able to help. It always pays to ask for private assistance, such as a "gift" from parents or loved ones, first though. But if this isn’t a possibility, then we can try one of the several programs offered at UMortgage. Please keep in mind, you will need to meet the income, debt-to-income ratio, and credit requirements in order to qualify. 

When you’re in the process of buying a home, it is required that an escrow account is set up on your behalf. This account is used to guarantee that the homeowners insurance and property taxes, known here forth as your "escrows", will be paid annually by your mortgage servicer via your escrow account. A lump sum is deposited into the escrow account at closing, and a certain amount will be automatically deposited into it every time you make your monthly mortgage payment. This is done by adding the monthly amount for each "escrow" to your mortgage payments. There is a way around this, though! If you are purchasing your home with a conventional loan and put 20% down for your down payment, you will have the option to pay a one time fee to waive your escrow account requirements. This means you will pay your "escrows" yourself, vs. your mortgage servicer paying them via your escrow account, and your "escrows" will not be included in your monthly mortgage payments. 

Closing costs include all the fees and charges you will need to pay before you can take ownership of the house. The fees you’ll have to pay typically include lender fees (also known as origination fees), title insurance fees, prepaid escrows, and more. You pay closing costs at the closing of your home and the amount can vary, but it is usually between 3% and 4% of the home’s selling price. 

Points are money that gets paid upfront in exchange for a lower interest rate. One point is equal to 1% of the loan amount, so on a $300,000 mortgage, one point will cost $3,000.  Paying points can be beneficial in most situations because they are tax-deductible. But to ensure it is the right move for you, I will punch the numbers to make sure it is worth it. For instance, you only want to pay points if the interest savings you’ll get over the life of the loan is going to be greater than the points paid. This is what I will calculate for you, and let you know! 

This question can only be answered by your own budget and expectations. For instance, if you want a lower monthly payment, then you will want to stretch the loan out over 30 years. But if you want to own your home quicker and you’re not worried about a higher monthly payment, then 15 years will be the better way to go.

Another consideration for choosing a 15-year mortgage is that the interest tends to be lower on a shorter loan, so you could wind up saving a lot of money with this type of mortgage.