Home Purchase Questions
How much should I put down on a house?
A common misconception is that a 20% down
payment is required, but we work with many
lenders who allow lower amounts. FHA loans
may require as little as 3.5%, while VA and
USDA loans may offer no down payment
options.
What is a pre-approval?
A formal process where we review your
financial details including, but not limited to,
your income, assets and credit, to determine
how much home you can afford. What you’re
pre-approved for is then put into writing on a
letter which we’ll provide to your real estate
professional to demonstrate your financial
ability to purchase a home.
What’s the difference between an appraisal and an inspection?
An appraisal determines the value of the
property to ensure the loan amount is
appropriate for the home’s worth and that a
home is safe and structurally sound. An
inspection asses far more thoroughly the
condition of the property, identifying any
potential issues with the home’s structure,
overall safety, systems and their remaining
lifespan. Home inspections are not required
but are recommended.
Refinance Questions
What is a refinance?
Refinancing involves replacing your current
mortgage with a new one, often to take
advantage of lower interest rates, change the
loan term, or turn your equity in to cash-in-
hand.
How do I know if it’s the right time to refinance?
You should consider refinancing if you can
secure a lower interest rate, reduce monthly
payments, shorten your loan term, or
consolidate debt. We will provide expert
assistance in assessing potential savings
versus refinancing costs to ensure it aligns
with your financial goals.
What is the difference between a refinance and a home equity loan?
Refinancing involves replacing your existing
mortgage with a new one, typically to secure a
lower interest rate or change loan terms. A
home equity loan allows you to borrow against
you’re equity you’ve built without replacing
your original mortgage – it’s a second
mortgage that will have a separate payment
from your first mortgage.
General Questions
What is a mortgage broker?
A mortgage broker is a professional who has
built strong relationships with many different
lenders. They use those relationships to shop
and secure the best mortgage terms for their
clients. They offer personalized advice and
access to diverse loan products, saving you
time and money compared to dealing directly
with a single lender. Lincoln Capital Funding is
a proud mortgage broker and has direct
relationships with over 20 different lenders.
What are the different types of mortgages?
- Fixed-Rate Mortgage: The interest rate stays the same for the entire term of the loan, making your monthly payments predictable.
- Adjustable-Rate Mortgage (ARM): The interest rate is fixed for a period of time and can change periodically based on market conditions, after the fixed rate period ends.
- Interest-Only Mortgage: You only pay the interest for a certain period, after which you start paying principal and interest.
- FHA Loan: A government-backed loan with lower down payment requirements and more lenient credit standards.
- VA Loan: A loan backed by the Department of Veterans Affairs for eligible veterans and surviving spouses, often with favorable terms.
- USDA Loan: A loan backed by the U.S. Department of Agriculture for rural and suburban homebuyers with low to moderate incomes.
What is the difference between the principal and interest?
- Principal: The original amount of money borrowed.
- Interest: The cost of borrowing that money, expressed as a percentage of the principal
How is my mortgage payment calculated?
- Your monthly mortgage payment typically includes:
- Principal: Repayment of the loan amount.
- Interest: The cost of borrowing.
- Taxes: Property taxes, which are often included in your payment and held in escrow by the lender.
- Insurance: Homeowners insurance and possibly private mortgage insurance (PMI) if your down payment is less than 20%.
What is an escrow account?
An escrow account is managed by the lender to hold funds for property taxes and insurance premiums. Your monthly mortgage payment often includes a portion that goes into this account, which the lender then uses to pay these expenses when they come due.
What are closing costs?
Closing costs are fees associated with finalizing the mortgage. They can include appraisal fees, title insurance, loan origination fees, and other charges. These typically amount to 2-5% of the home’s purchase price.
How long is a typical mortgage term?
Mortgage terms commonly range from 15 to 30 years. A 30-year term has lower monthly payments but higher overall interest costs compared to a 15-year term.
What is a mortgage amortization schedule?
An amortization schedule is a table that shows each payment’s breakdown between principal and interest throughout the life of the loan, as well as the remaining balance after each payment.
How is my mortgage rate determined?
Your mortgage rate depends on several factors, including, but not limited to, your credit score, loan amount, down payment, loan type, property type and current market conditions.
How long is the mortgage process?
The industry average is 30-45 days from application to closing. We average 12-14 days for a refinance and 14-20 days for a home purchase.
What credit score do I need to qualify for a mortgage?
Conventional mortgages require a minimum credit score of 620, though higher scores result in better terms. When it comes to FHA and VA loans, many lenders require credit scores of 580 and above, however, we work with many lenders who allow for scores 500 and above.
What our clients say about us.
"Lincoln Capital Funding made buying my first home a breeze! The process was fast, and the team was incredibly helpful every step of the way. I couldn’t have asked for a better experience and highly recommend them for anyone looking for a hassle-free home loan!"
I approached Lincoln Capital Funding for a business loan, and they exceeded my expectations. The terms were flexible, and the entire process was transparent and straightforward. Thanks to them, I was able to expand my business seamlessly!
Lincoln Capital Funding helped me secure a car loan with great rates and minimal paperwork. Their customer service was outstanding, and they made sure I fully understood the terms before moving forward. I’ll definitely work with them again for future financial needs!
