Mortgage FAQs
Questions people ask before they apply.
All FAQs are basically pain points that cause people to reach out and ask for help, right? Our FAQs acknowledge the problem that brought you here, where it goes wrong in the deal, how we resolve these issues, and what you can do to prepare in advance.
Today's question
All questions
What is a Closing Disclosure, and when do I get it?
A Closing Disclosure is the five-page form with your final rate, payment, and closing costs. Its job is to let you compare those fees to the earlier Loan Estimate so a lender cannot sneak in last-minute charges the way some did in the 2000s. Federal law says you must have it at least three business days before you sign. Egan Financial Group LLC issues the Closing Disclosure when the loan is approved, so it is in your hands with plenty of time before closing.
Read the full answerCan I use money from my business checking account for the down payment?
Sometimes, if you own the account and we can show the withdrawal will not starve the business. If we are also using your self-employment income, the underwriter looks at cash flow, not just the balance. A big outgoing transfer the week of closing can hurt both the company and the loan. Egan Financial Group LLC will not count business cash that makes the tax-return income unbelievable.
Read the full answerHow long do I pay FHA mortgage insurance?
FHA loans have an upfront premium plus a monthly premium called MIP. On a typical 30-year FHA loan with less than 10 percent down, monthly MIP lasts for the life of the loan. With 10 percent down or more, it usually stops after 11 years. That is different from conventional PMI, which can drop off when you reach enough equity. Egan Financial Group LLC will show both options with insurance included.
Read the full answerHow is VA residual income different from debt-to-income?
Debt-to-income is your monthly debts divided by your gross monthly pay. VA residual income is what is left after those debts for the household to live on — food, gas, and clothes. The VA publishes tables by region and family size. You can pass debt-to-income and still fail residual, or the reverse. Egan Financial Group LLC runs both on a VA file before you write an offer.
Read the full answerDo I have to live in the house I am financing?
If the loan is priced as a primary residence, yes. You intend to live there, usually within about 60 days after closing. A second home and an investment property are different loans, with more money down and different pricing. Saying you will live there when you will not is occupancy fraud. Egan Financial Group LLC originates the occupancy you actually plan to use.
Read the full answerWhy did the lender call my job again right before closing?
Because the investor requires a fresh check that you still work there. For regular wage income, Fannie Mae wants that confirmation within 10 business days before you sign the note. It is usually a phone call or an electronic check to your employer. At Egan Financial Group LLC it is a normal last step, not a sign the loan is falling apart.
Read the full answerWill collections or a bankruptcy stop me from getting a mortgage?
Not always. On a regular Fannie Mae loan, a Chapter 7 bankruptcy generally needs four years from discharge or dismissal. Chapter 13 is often two years from discharge, or four years from dismissal. Some collections must be paid; some files can leave small ones alone. FHA and VA have their own clocks. Egan Financial Group LLC reads the dates on your report before you shop, not a scare headline.
Read the full answerCan a parent co-sign my mortgage if they will not live in the house?
Sometimes. That person is a non-occupant co-borrower: on the loan, not in the bedrooms. Conventional, FHA, and VA loans treat this differently, and there are limits. Your parent’s credit, income, other houses, and debts all go on the file. It is not a silent signature. Egan Financial Group LLC underwrites everyone who will be on the note.
Read the full answerHow do student loans count on a mortgage if I am on an income-driven plan?
If the credit report shows a real monthly payment, that payment is often what we use. If it shows $0, Fannie Mae and Freddie Mac — the two companies that buy most regular home loans — do not use the same math. Fannie can allow a documented income-driven payment, even $0 if the papers prove it, and may use 1 percent of the balance on some deferred loans. Freddie often uses half a percent of the balance when the report shows $0. Egan Financial Group LLC uses the investor on your file, not a blog.
Read the full answerDoes my earnest money have to be sourced for underwriting?
Yes, if it was a large deposit or it is part of the cash you need to close. The underwriter needs to see the money leave your account, or the donor’s account, and show up at the title or escrow company. A signed contract that says you paid earnest money is not the paper trail. Egan Financial Group LLC matches the receipt to the bank line.
Read the full answerWhat happens if the appraisal comes in lower than the purchase price?
The loan is based on the lower of the contract price or the appraised value. If the appraisal is short, you need a lower price, more cash from you, a different loan structure, or you use the appraisal contingency in the contract to walk away. Egan Financial Group LLC cannot lend on a number the appraiser did not support.
Read the full answerWhat are mortgage reserves, and how many months do I need?
Reserves are money still in the bank after you pay the down payment and closing costs — a cushion of house payments. Some files need none. Two-to-four-unit homes, second homes, and investment properties often need several months of the full payment. Egan Financial Group LLC does not use a brochure number. The loan type and the rest of your file set it.
Read the full answerCan I use my 401(k) for a down payment?
Often yes, from money that is vested — truly yours in the plan. You can take a withdrawal or, in some plans, a loan against the account. A withdrawal can mean taxes and a penalty if you are under age 59½. A 401(k) loan can add a monthly payment to your debt-to-income ratio. Egan Financial Group LLC needs the plan statement, not a login screenshot.
Read the full answerDoes overtime, bonus, or commission count toward my mortgage?
It can, when it has a history and it is likely to continue. Most regular loans look at about two years of that extra pay, not last month’s big check. If overtime just started, or commission swings a lot, the underwriter may use little of it or none. Egan Financial Group LLC counts base salary first, then only the extra pay the investor will actually accept.
Read the full answerWhat does it mean when my loan has conditions or is suspended?
Conditions are a to-do list attached to an approval: papers still needed before Egan Financial Group LLC can fund the loan. Suspended means the underwriter paused because something required is missing or unclear. It is not a denial. Your rate hold and your purchase contract are still on the clock until those items are in and cleared.
Read the full answerWhat is a letter of explanation, and when do I need one?
A letter of explanation is a short signed note in your own words that fills a gap the papers do not. Late payments, a job gap, a large deposit, or extra credit inquiries are the usual reasons. It is not a waiver and it does not erase history. Egan Financial Group LLC uses it so the underwriter — the person who has to say yes — can see what happened.
Read the full answerCan I change jobs before my mortgage closes?
Sometimes, if the new job is similar work, similar or higher pay, and you can document the offer. Switching from a regular paycheck to 1099 or commission work, taking a pay cut, or leaving a gap with no job can stop the loan. Egan Financial Group LLC also has to confirm you still work there shortly before closing. Tell us before you give notice.
Read the full answerCan I use a credit card, buy a car, or open a store card while my mortgage is in underwriting?
Normal charges on a card you already have are usually fine. A new car, a new credit card, or a big furniture ticket is not. Egan Financial Group LLC pulls credit again before closing. A new monthly payment changes your debt-to-income ratio — the share of your monthly pay that already goes to debt — and can undo an approval you thought was finished.
Read the full answerWhy is the underwriter asking about a large deposit in my bank account?
On a regular Fannie Mae purchase, a large deposit is a single deposit bigger than half of your monthly qualifying income. If Egan Financial Group LLC cannot show where that money came from, the underwriter — the person who has to say yes to the loan — takes it out of the cash you can use to close. Your paycheck is usually fine. Cash, Venmo piles, and transfers with no paper trail are not.
Read the full answerWhy does my condo loan need a full project review now?
Because Fannie Mae and Freddie Mac retired the old shortcut reviews. For loan applications dated on or after August 3, 2026, most established condo buildings have to pass a full project review — budget, reserves, insurance, and lawsuits — not a light questionnaire. A few small projects can still skip that. The building can fail even if you look perfect on paper.
Read the full answerCan a fast closing help me win a house when other buyers are bidding?
Often, yes. A seller who has two similar offers will take the one that can actually close on the date in the contract. Speed is not a slogan. At Egan Financial Group LLC the originator, underwriter, closer, and funder are the same shop — not four departments and a national queue. We can write a closing date we can actually make.
Read the full answerHow long does a mortgage closing take, and do I have to take the day off?
The signing itself is usually about 30 to 60 minutes if the file is already clear to close. You should not have to burn a whole vacation day sitting around for a wire. Other lenders often make you sign, then wait on a funding desk. As a mortgage banker, Egan Financial Group LLC sends the money. When the file is clear, funds can be waiting at the table.
Read the full answerHow do I download bank statements and daily activity readouts so Fannie Mae and Freddie Mac will accept them?
Log into the bank or investment site and download the official statement PDF from Statements or Documents — not a photo of your phone. If we also asked for a daily activity readout, print that the same way, with the URL showing. Fannie Mae allows computer-generated online statements if they identify the institution and the source of the information, such as an internet banner. A cropped screenshot usually does not. If you print a webpage, turn on headers and footers so the URL and date show. Send every page. Egan Financial Group LLC will tell you if a file will not pass underwriting.
Read the full answerWhen should I shop for homeowners or condo insurance, and what do I need?
Start as soon as you are under contract — earlier if you already have a target address. The loan cannot fund without a binder that names the lender correctly. Shop two or three quotes with the same coverage, not the cheapest number with a hole in it. We give you the mortgagee clause and loan number. You still pick the carrier. Egan Financial Group LLC does not sell insurance.
Read the full answerDo I have to use the builder’s lender to get the advertised rate?
Often, if you want that specific incentive. Production builders can buy the rate down because they control the concession. A regular seller usually cannot match it. Using the builder’s mortgage company is typically a condition of the advertised buydown — not a law that you must use them. You can still get an independent Loan Estimate before you give the incentive up.
Read the full answerWhat is an 80/10/10 piggyback loan, and can it keep me under the jumbo limit?
It is two mortgages plus a down payment: 80 percent first, 10 percent second, 10 percent down. The first loan stays at 80 percent, so you usually avoid conventional PMI. In 2026 it is also used to keep that first loan at or under the $832,750 conforming baseline for a one-unit home. The second loan typically has a higher rate. Run the piggyback and a single jumbo before you pick.
Read the full answerThe lender approved me for more than I can afford. What should I do?
Use the payment you can make in a slow year, not the maximum an automated engine will approve. A pre-approval is a ceiling, not a shopping list. Taxes, insurance, HOA, and repairs sit on top of the loan payment. Tell us the number you actually want to write, and we will size the file to that.
Read the full answerHow much can a seller pay toward my closing costs in 2026?
The loan program sets a maximum. Typical ceilings are 6 percent of the price on FHA, 4 percent on VA, and 3, 6, or 9 percent on conventional depending on your down payment. That is a cap, not a promise, and it cannot be more than your actual allowed costs. A temporary rate buydown is a kind of concession, and it still has to fit the cap and the contract.
Read the full answerWhy did my mortgage payment go up if my interest rate did not change?
On a fixed-rate loan, principal and interest stay the same. The total payment still moves when the escrow account is recalculated for property taxes and homeowners insurance. Those bills are the usual reason. The lender did not change your rate, and they did not change the note.
Read the full answerCan I take over the seller’s mortgage rate?
Sometimes, if the loan is FHA, VA, or USDA and the documents allow it. You still have to qualify, and you have to cover the seller’s equity in cash or with a second loan. Most conventional loans are not assumable. An old 3 percent loan in a 6 percent market is valuable. It is not automatic, and it is not free.
Read the full answerIs 20 percent down worth it, or should I buy with less?
Twenty percent down avoids conventional PMI and can make the offer look stronger. It is not required. Conventional 3 percent, FHA 3.5 percent, and VA zero down are real programs. The better choice is the one whose full payment — loan, taxes, insurance, PMI or FHA insurance, and HOA — you can carry, with cash still in the bank after closing.
Read the full answerShould I wait for mortgage rates to drop before I buy a house?
Not if the home fits and you can carry the payment through a slow year. National 30-year averages have been in the mid-6s. That is a survey of what lenders reported, not a quote from this office. Waiting only helps if rates fall enough to beat what you will spend on rent, and if prices do not rise while you sit it out.
Read the full answerHow should I compare two or three mortgage quotes?
Keep the purchase price the same, then look at three things: the full monthly payment (loan, taxes, insurance, and HOA), cash to close, and what you will have spent after 5, 7, or 10 years. The cheapest monthly payment is often the 30-year. The cheapest loan over a decade is often a shorter term or a quote with fewer points. Type in every rate yourself. A calculator is not a lock.
Read the full answerShould I choose a 15-year or a 30-year mortgage?
A 30-year loan has a lower monthly payment and more room if a year goes badly. A 15-year loan has a higher payment, usually a lower rate, and a lot less interest over the life of the loan. Pick the payment you can make in a slow year. If you want the 15-year result, you can pay extra principal on a 30-year without being trapped by the higher required payment.
Read the full answerWhat is a successor in interest on a mortgage?
A successor in interest is someone who receives the home — through death, divorce, or certain transfers — while a mortgage is still on it. They can have the right to information and to talk about hardship options even if they were not the original borrower. It is not an automatic takeover of the loan.
Read the full answerHow do I verify a mortgage lender is licensed?
Look up the company and the loan officer on NMLS Consumer Access at nmlsconsumeraccess.org. Check the legal name, the NMLS ID, and a license in the state where the home sits. Egan Financial Group LLC is NMLS 2647764, Illinois residential mortgage license 0310003293. If the numbers on the website do not match NMLS, stop.
Read the full answerHow long does mortgage underwriting take?
A complete, simple file can be conditionally approved in a few business days. A condo with a slow association, a self-employed tax return, or a gift that is still in transit can take two or three weeks. The law also requires a Loan Estimate within three business days of application and a Closing Disclosure at least three business days before you sign. That calendar is not optional.
Read the full answerHow do self-employed borrowers qualify for a mortgage?
Most regular loans average two years of self-employment income from tax returns. We add back some non-cash expenses and we do not count one-time income as if it happens every year. A great year after a weak year still gets averaged. Bring the returns you filed, K-1s, and a year-to-date profit and loss — not a screenshot of last month’s sales.
Read the full answerWhat debt-to-income ratio do mortgage lenders use?
Debt-to-income is your monthly debt payments divided by your gross monthly income. There is no single legal maximum. Automated underwriting looks at the whole file — credit, reserves, the loan type — and a 50 percent ratio can approve while a 36 percent ratio can decline. The rest of the file decides, not a round number from a brochure.
Read the full answerWhat is an escrow or impound account on a mortgage?
It is a bucket the loan servicer uses to pay your property taxes and homeowners insurance. You pay a piece of those bills every month with the mortgage. Not every state requires it, but many loans do, especially with less than 20 percent down. The deposit at closing covers the months before the next tax bill is due.
Read the full answerWhat closing costs should I expect on a home loan?
Plan on lender fees, title insurance, recording, a few days of prepaid interest, and deposits for taxes and insurance. Transfer taxes and who pays them are often a local custom, and they are negotiated in the contract. A Loan Estimate lists the actual file. Anyone quoting one round number before an application is guessing.
Read the full answerShould I pay discount points or take a lender credit?
Discount points are prepaid interest that buy a lower rate. A lender credit does the reverse: you take a higher rate and the lender covers part of your closing costs. Pay points if you will keep the loan long enough to earn that money back. Take a credit if you need to preserve cash at the table.
Read the full answerWhat is the difference between interest rate and APR?
The interest rate is the number used to calculate your monthly principal and interest. APR folds in certain upfront finance charges so you can compare a quote that hides cost in points with a quote that hides cost in the rate. APR is a disclosure tool. It is not your payment, and it is not the whole story if you will sell in a couple of years.
Read the full answerWhat is a mortgage rate lock?
A lock is the lender’s agreement to hold a specific rate and points for a set number of days while the loan is approved and closed. If that window runs out before you close, the loan is re-priced at whatever the market is doing, unless you pay to extend it. A lock is not an approval, and it is not a promise that the house will appraise.
Read the full answerWhat is PMI, and when does it drop off?
Private mortgage insurance protects the lender when you put down less than 20 percent on a conventional loan. If you stay current, you can usually ask to cancel it when you reach 20 percent equity based on the original value, and it should fall off automatically at 22 percent. FHA insurance is a different product and often lasts for the life of the loan.
Read the full answerCan I consolidate credit cards and auto loans into my mortgage?
Often yes, with a cash-out refinance. The new mortgage pays off your current home loan plus the debts you choose to roll in. You still have to qualify, and on a conventional loan you typically cannot go above about 80 percent of the home’s value. A lower monthly payment is not the same thing as saving interest.
Read the full answerHow does a cash-out refinance work?
You replace your current mortgage with a larger one and take the difference in cash at closing, as long as you have the equity and you still qualify. The new loan is judged on rate, your other debts, and the appraisal. Cash-out usually prices a little worse than a plain rate-and-term refinance on the same credit.
Read the full answerHow do I calculate the break-even on a refinance?
Divide what the refinance costs by how much you save each month. If it costs $3,000 and you save $250 a month, you break even in 12 months. If you will sell or refinance again before that, it does not pay for itself. Count points, title, recording, and prepaid interest in the cost — not just the lender’s origination fee.
Read the full answerWhat should first-time homebuyers know before they apply?
You still need credit, income, and enough cash after closing to fit a real loan program. Many states have down-payment help, but those programs have income limits, price caps, and a class you have to finish. Conventional 3 percent down, FHA 3.5 percent, and VA zero down are starting points, not a promise that you are approved.
Read the full answerShould I use FHA or conventional financing?
FHA can be the better fit if your credit is thinner, you have less to put down, or your other monthly debts are higher — with the tradeoff that mortgage insurance often lasts for the life of the loan. Conventional can cost less over time if your credit is stronger and you can put at least 5 to 20 percent down, because that insurance can be cancelled. We pick the cheaper file, not the nicer-sounding name.
Read the full answerCan I use gift funds for a down payment?
Yes, on most purchase programs, if the gift comes from someone the program allows and we can show the money left their account and landed in yours. Earnest money, down payment, and closing costs can often be gifted. A loan that is dressed up as a gift is not a gift.
Read the full answerWhat is the difference between a mortgage pre-qualification and a pre-approval?
A pre-qualification is a conversation about what you might afford based on what you tell us. A pre-approval is a real credit pull and real documents, and it means a lender is willing to finance a loan amount if the house, the title, and final underwriting check out. Sellers treat those two letters very differently.
Read the full answerWhat is a VA IRRRL, and when does a streamline refinance make sense?
An IRRRL is a VA streamline refinance of an existing VA loan. It is meant to lower your rate, or to move from an adjustable rate to a fixed one, with less paperwork than a cash-out. The 2026 funding fee is 0.5 percent. It still has to actually help you — that is the net-tangible-benefit test.
Read the full answerWhat is the VA funding fee in 2026?
On a first-time VA purchase with less than 5 percent down, the funding fee is 2.15 percent of the loan. A subsequent use with less than 5 percent down is 3.3 percent. Putting 5 percent down lowers both to 1.5 percent; 10 percent down lowers both to 1.25 percent. Many Veterans with a service-connected disability rating pay $0.
Read the full answerHow do VA home loans work in 2026?
If you are an eligible Veteran, service member, or qualifying surviving spouse, a VA purchase loan can mean no down payment and no monthly mortgage insurance. There is a funding fee on most loans, and it can be rolled into the amount you borrow. VA guarantees part of the loan; a VA-approved lender still has to underwrite and fund it.
Read the full answerWhen do I need a jumbo mortgage?
You need a jumbo, or another non-conforming loan, when the amount you are borrowing is over the conforming limit for that property and county. For most one-unit homes in 2026, that line is $832,750. Jumbo loans have their own pricing, reserve rules, and paperwork, and those rules belong to the investor, not to a nickname.
Read the full answerWhat is the 2026 conforming loan limit?
For 2026 the typical conforming limit on a one-unit home is $832,750. Some high-cost counties have higher limits. Two-unit, three-unit, and four-unit properties have higher limits too.
Read the full answerHow do HOA budgets and reserves affect a condo loan?
The association has to show it can take care of the building without surprising you with a big bill the week after closing. Underwriters read the budget, the insurance, the questionnaire, and a reserve study if one exists. Thin reserves and an old roof are a building problem, not a credit-score problem.
Read the full answerCan I get a mortgage on a condo?
Yes, if the building can pass the investor’s review. Lenders look at the homeowners association as much as they look at you — the budget, how many owners live there, commercial space, lawsuits, and special assessments. A beautiful unit in a troubled building is often not financeable on regular terms.
Read the full answerHow does lender overhead change the interest rate I am offered?
The rate you are offered has to cover the investor’s required return plus the lender’s cost of doing the loan. Ads, unused office space, and layers of management are part of that cost. A smaller shop does not have those bills, so it does not need as wide a margin on the same credit.
Read the full answerWhat is a micro mortgage banker?
It is a licensed lender that funds loans the way a bank does, without the cost of a national brand — no stadium ads, no floors of managers, no investors waiting on a huge return. The idea is straightforward: if the shop costs less to run, more of the price can stay in the rate instead of in the overhead.
Read the full answerWhat is the difference between a mortgage banker and a mortgage broker?
A mortgage banker takes your application, underwrites the file, and funds the loan. A mortgage broker shops your file to other lenders and does not fund it. Egan Financial Group LLC is a banker, so you are working with the company that actually makes the loan — not a middle layer sending your paperwork somewhere else.
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