Christina Cutolo · Mortgage Pro

Mortgage & Financing FAQ

The questions I get asked most — answered in plain English by a licensed loan officer who also invests. No jargon, no sales pitch.

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Getting Started

Less than most people think. Conventional loans for a primary home can start around 3–5% down, FHA at 3.5%, and VA or USDA at 0% for those who qualify. Investment properties usually want 15–25% down. Putting less than 20% down on a primary home means you'll pay PMI until you reach 20% equity, but that's often a smart trade if it gets you in the door sooner.
You can often qualify with a score in the low 600s, and FHA goes lower still. But your score drives your rate — the difference between a 680 and a 760 can be a noticeably higher monthly payment over the life of the loan. If you're a few points away from the next tier, it's worth a quick conversation before you apply; small moves can save real money.
Pre-qualification is a rough estimate based on what you tell the lender. Pre-approval is the real thing: the lender verifies your income, assets, and credit and issues a letter sellers take seriously. In a competitive market, get pre-approved before you shop — it tells you your true budget and makes your offer credible.
Lenders look at your debt-to-income ratio (DTI) — your monthly debts divided by gross monthly income. Many programs want total DTI at or below about 43–50%. But "qualify for" and "comfortable with" are different numbers. Build your budget around the full payment including taxes, insurance, and maintenance, not just principal and interest.

Rates, Costs & PMI

The interest rate is what you pay on the loan balance. The APR rolls in certain fees and costs, so it's a fuller picture of what the loan actually costs per year. When comparing lenders, compare APRs — a low rate with high fees can cost more than a slightly higher rate with low fees.
Private mortgage insurance protects the lender when you put less than 20% down on a conventional loan. It's added to your monthly payment. You can typically request removal once you reach 20% equity, and it usually drops automatically at 22%. FHA loans handle this differently — their mortgage insurance often stays for the life of the loan unless you refinance.
A point costs 1% of the loan amount and lowers your rate. It makes sense if you'll keep the loan long enough to recoup the cost through lower payments — your break-even point. If you might sell or refinance within a few years, points usually aren't worth it. Run the math on your specific timeline.
Closing costs are the one-time fees to finalize the loan — lender fees, title, appraisal, escrow, and prepaid taxes and insurance. They typically run about 2–5% of the purchase price. Buyers usually pay them, but they can sometimes be negotiated into the deal as a seller credit, especially in a slower market.

Loan Types

A fixed-rate loan keeps the same rate for the whole term, so your principal and interest never change. An adjustable-rate mortgage (ARM) starts lower but can move after an initial fixed period. If you plan to stay long-term, the stability of a fixed rate is usually worth it. ARMs can fit shorter horizons or specific strategies.
A DSCR (Debt-Service Coverage Ratio) loan qualifies you based on the property's rental income rather than your personal income. The lender checks whether the rent covers the debt payment. It's popular with investors who have strong properties but complex tax returns, and it's a tool I use myself for buying rentals.
Yes. Options include conventional investment-property loans, DSCR loans that count projected or actual STR income, and sometimes second-home financing if you'll use it personally part of the year. The right choice depends on the property, your income picture, and how you'll operate it — this is exactly the kind of thing worth a conversation.
House hacking means living in part of a property while renting out the rest — a duplex, a home with a basement unit, or rooms. Because you live there, you can use owner-occupied financing with low down payments, while the rental income helps cover your mortgage. It's one of the smartest first moves for new investors.

The Process

Most purchase loans close in about 30–45 days from accepted offer, though it can be faster with a responsive borrower and clean file. The biggest delays usually come from documentation — respond quickly to your lender's requests and avoid big financial changes during the process.
Generally: recent pay stubs, W-2s or 1099s, two years of tax returns (especially if self-employed), recent bank and asset statements, and ID. Self-employed and investor borrowers may need more, like profit-and-loss statements or lease agreements. Having these ready upfront makes everything faster.
Don't open new credit cards or loans, don't make large unexplained deposits, don't change jobs if you can avoid it, and don't make big purchases on credit. Any of these can change your qualification right before closing. When in doubt, ask your loan officer before you do it.
Yes — refinancing replaces your current loan with a new one, ideally at a lower rate or better terms. It has its own closing costs, so the rule of thumb is to make sure you'll stay in the loan long enough to recoup them. Marry the house, date the rate.
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