03/16/2026
🏡 Home Financing FAQs — Let’s Break It Down!
Buying a home comes with a lot of questions, and that’s completely normal. Here are a few of the most common financing questions I get and what they actually mean for you:
✔️ What is a Pre-Approval?
A pre-approval is when a lender reviews your income, credit, and financial documents to determine how much home you may qualify for. It’s much stronger than a quick online estimate and shows sellers that you’re a serious buyer who has already taken the first step toward securing financing.
✔️ Fixed vs. Adjustable Interest Rates
A fixed-rate mortgage keeps the same interest rate for the life of the loan, which means predictable monthly payments. An adjustable-rate mortgage (ARM) may start with a lower rate for a certain period, but the rate can adjust later based on market conditions.
✔️ How Much Do I Need for a Down Payment?
Many people assume you need 20% down, but that’s not always the case. Depending on the loan program, down payments can be as low as 3%, and some programs even offer down payment assistance to help buyers get into a home sooner.
✔️ What Are Closing Costs?
Closing costs are the fees associated with finalizing your home purchase. These can include lender fees, appraisal costs, title work, escrow services, and prepaid items like property taxes or homeowners' insurance. They typically range from about 2–5% of the purchase price. These can also be negotiated into the offer for the seller to pay!
✔️ How Does My Credit Score Affect My Loan?
Your credit score helps determine the interest rate and loan options available to you. Generally, a higher score can help you qualify for better rates and more favorable loan terms, which can make a difference in your monthly payment over time.
✔️ What Is Mortgage Insurance?
Mortgage insurance is usually required when putting less than 20% down on a conventional loan. It helps protect the lender if a borrower defaults on the loan and allows buyers to purchase a home with a smaller down payment.
Buying a home doesn’t have to feel overwhelming when you have the right guidance. I’m always happy to walk through your options and answer questions along the way.
Lyndzie Thompson | Mortgage Advisor
425-583-7046
