FHA
3.5% down · 580 score
The forgiving one. Built for first-time buyers. Lower credit, lower down, more lenient on debt ratios. Trade-off: monthly mortgage insurance for the life of the loan unless you put down 10%+.
Mortgage 101 · ~10 min read
How mortgages
actually work.
A mortgage isn't magic. It's a loan secured by the house, paid monthly over 15 or 30 years. Four main loan types. One process. And a list of pitfalls nobody warns you about. Let's get into it.
· The plain truth
A mortgage
in three sentences.
You borrow money from a lender to buy a house. The house itself is the collateral. You pay it back monthly — principal and interest — over 15 or 30 years.
Your monthly payment usually includes four things, called PITI: Principal, Interest, Taxes, Insurance. Sometimes also HOA dues, mortgage insurance, and flood insurance. Always more than just “the rate.”
If you stop paying, the lender forecloses and takes the house back. That's it. That's the whole concept. Everything else is paperwork.
· The four lanes
Pick your
loan type.
Most buyers don't actually pick — their loan officer picks for them based on the file. But you should know the four. The choice changes your down payment, your monthly, and how forgiving the underwriting is.
Conventional
3% down · 620 score
The default. Slightly stricter credit and DTI requirements, but no upfront mortgage insurance and PMI drops off at 80% loan-to-value. Best long-term math for most borrowers with decent credit.
VA
0% down · flexible credit
Earned by service. Active duty, veterans, eligible spouses. No down payment required, no monthly mortgage insurance, competitive rates. The best loan in America if you qualify.
USDA
0% down · rural areas
Geography-gated. If you're buying in a USDA-eligible zone (which includes a lot more than you'd think), zero down with low rates. Income limits apply. Underused, underrated.
· The three columns
What lenders
actually check.
Underwriting software isn't magic. It's a checklist against three variables — Income, Credit, Assets. Strengthen any one and your whole file gets better. Ignore one and the other two can't save you. We have a whole page on this.
· The timeline
From pre-approval
to keys, in 30 days.
- Day 1
01. Pre-approval
Doc stack to your loan officer. They run the file, pull credit, get an underwriter sign-off. You walk out with a number sellers take seriously.
- Days 2-30
02. House hunt + offer
Realtor pulls comps. You write an offer with three contingencies (financing, appraisal, inspection). When it's accepted, the 30-day clock starts.
- Days 5-15
03. Inspection + appraisal
You inspect the house. Lender appraises it. Both can renegotiate the deal. Most surprises live here — that's why the contingencies exist.
- Days 20-29
04. Underwriting + CTC
Underwriter re-verifies everything. Don't open new credit, don't change jobs, don't move money around. Clear-to-close means you're 48 hours from keys.
- Day 30
05. Closing day
Two hours. Lots of signatures. One wire. Keys in your hand. The Note is the binding document — read the rate, term, and payment before you sign.
· Watch-outs
Four pitfalls
that kill deals.
Pitfall 01
Falling for the Zillow pre-qual.
Those instant quotes are pre-quals — no docs, no credit, no underwriter. Sellers know the difference. Get a real pre-approval before house-hunting.
Pitfall 02
Maxing your approval.
The lender's number tells you what underwriting will allow. It does NOT tell you what you can comfortably afford. Build the budget first. Then qualify against it.
Pitfall 03
Opening a new credit card mid-process.
A new tradeline pulls credit and shifts your DTI. Underwriting re-verifies up to the hour. One wrong move can blow a closing two days before keys.
Pitfall 04
Skipping the inspection to win the bid.
Every waived inspection story ends with a $12K basement or a $20K roof. If you must waive, budget the unknowns into your effective purchase price.
· FAQ
Five questions
we get every week.
What credit score do I need to get a mortgage?
FHA accepts 580 with 3.5% down — and 500 with 10%. Conventional starts at 620. VA and USDA are flexible. A higher score = a lower rate, which on a 30-year loan can mean tens of thousands of dollars.
How much do I need for a down payment?
Less than you think. FHA: 3.5%. Conventional: 3%. VA and USDA: 0%. And there are 57+ down payment assistance programs in PA and OH alone — most buyers qualify for at least one.
Pre-qualification vs pre-approval — what's the difference?
Pre-qual is a guess based on what you told them. Pre-approval is documented — credit pulled, income verified, underwriter blessed. Sellers only take the second one seriously.
How long does it take to close?
30 to 45 days from accepted offer to keys in hand. Some DPA programs add a week. Your loan officer should give you a calendar with every milestone, not vibes.
What are closing costs and how much should I expect?
Roughly 2-5% of the purchase price. Lender fees, title, appraisal, prepaid taxes and insurance. Some are negotiable. Many DPA programs help cover them. We have a whole guide on this.
Now you know how it works.
See where you actually stand.
Five minutes. No credit pull. Honest answers on income, credit, and assets — scored against real programs.