FAQs - Thompson Kane & Company - Home Mortgage Loans

Getting Started

Where the mortgage journey begins, and what to do before you start house hunting.

What's the first step in getting a mortgage?

Talk to a loan officer before you start touring homes. A short conversation tells you what price range makes sense, what loan programs fit your situation, and what documents you'll need to gather. There's no application, no credit pull, and no obligation at this stage. Once you're ready, the next step is pre-approval.

What's the difference between pre-qualification and pre-approval?

Pre-qualification is an informal estimate based on what you tell us. Pre-approval is a documented review of your income, assets, and credit, resulting in a letter that sellers and agents take seriously. In most markets today, sellers expect pre-approval before they'll consider an offer.

How much house can I afford?

Affordability depends on your income, monthly debts, down payment, credit, and the loan program you qualify for. Your loan officer can run real numbers for your situation in a single conversation. Online calculators are useful for ballparking, but they don't account for taxes, insurance, PMI, or program-specific rules that change the math.

How long is a pre-approval letter good for?

Typically 60 to 90 days. If your house search runs longer, we'll refresh the letter with updated documentation. Pre-approval letters carry an expiration because income, credit, and rates can shift, and sellers want to see a current one with an offer.

Does getting pre-approved hurt my credit?

Pre-approval involves a credit pull, which is a small, temporary factor in your score, usually a few points. Multiple mortgage inquiries within a short window (typically 45 days) are treated as a single inquiry by the major credit scoring models, so the impact doesn't compound.

How long does the whole process take, from application to closing?

Most loans close in 30 to 45 days from a complete application. Cash-out refinances and complex files can take longer. We'll give you a realistic timeline at the start and flag anything that could slow the process down.

Do I need a real estate agent before I get pre-approved?

No. Many buyers get pre-approved first so they know their budget before they start working with an agent. If you'd like a referral to an agent we've worked with successfully, we're happy to make one.

Getting Started

Where the mortgage journey begins, and what to do before you start house hunting.

What's the first step in getting a mortgage?

Talk to a loan officer before you start touring homes. A short conversation tells you what price range makes sense, what loan programs fit your situation, and what documents you'll need to gather. There's no application, no credit pull, and no obligation at this stage. Once you're ready, the next step is pre-approval.

What's the difference between pre-qualification and pre-approval?

Pre-qualification is an informal estimate based on what you tell us. Pre-approval is a documented review of your income, assets, and credit, resulting in a letter that sellers and agents take seriously. In most markets today, sellers expect pre-approval before they'll consider an offer.

How much house can I afford?

Affordability depends on your income, monthly debts, down payment, credit, and the loan program you qualify for. Your loan officer can run real numbers for your situation in a single conversation. Online calculators are useful for ballparking, but they don't account for taxes, insurance, PMI, or program-specific rules that change the math.

How long is a pre-approval letter good for?

Typically 60 to 90 days. If your house search runs longer, we'll refresh the letter with updated documentation. Pre-approval letters carry an expiration because income, credit, and rates can shift, and sellers want to see a current one with an offer.

Does getting pre-approved hurt my credit?

Pre-approval involves a credit pull, which is a small, temporary factor in your score, usually a few points. Multiple mortgage inquiries within a short window (typically 45 days) are treated as a single inquiry by the major credit scoring models, so the impact doesn't compound.

How long does the whole process take, from application to closing?

Most loans close in 30 to 45 days from a complete application. Cash-out refinances and complex files can take longer. We'll give you a realistic timeline at the start and flag anything that could slow the process down.

Do I need a real estate agent before I get pre-approved?

No. Many buyers get pre-approved first so they know their budget before they start working with an agent. If you'd like a referral to an agent we've worked with successfully, we're happy to make one.

The Loan Process

From application to closing: what happens, when, and what we'll need from you.

What documents will I need to provide?

At a minimum: recent pay stubs, two years of W-2s or tax returns, two months of bank statements, ID, and authorization to pull credit. Self-employed borrowers, retirees, and borrowers with investment income will need additional documentation. After your first conversation, we'll send a checklist built for your situation instead of a generic one.

What's underwriting, and what are they looking for?

Underwriting is the formal review of your file against the loan program's guidelines. The underwriter verifies your income, assets, credit, and the property itself, and confirms the loan meets investor and regulatory standards. Most underwriting decisions come back within a few business days of a complete file.

What is an appraisal, and who pays for it?

An appraisal is an independent valuation of the property, ordered through a third-party management company to keep it impartial. The borrower pays for it, typically $500 to $700 depending on the market and property type. The appraisal protects you and the lender from overpaying.

What happens if the appraisal comes in low?

A low appraisal means the property appraised for less than the purchase price. You have options: renegotiate the price with the seller, bring additional cash to cover the gap, dispute the appraisal with supporting comparable sales, or walk away if your contract allows. We'll walk you through which path makes sense for your situation.

What is an escrow account?

An escrow account is a holding account your lender uses to pay your property taxes and homeowners insurance on your behalf. A portion of your monthly mortgage payment goes into escrow, and the lender pays the bills when they come due. This keeps your taxes and insurance current without you having to manage large lump-sum payments.

What happens at closing?

At closing, you'll sign the final loan documents, pay your down payment and closing costs, and receive the keys. Closings typically take an hour and happen at a title company office or, in some states, remotely. We'll send a closing disclosure at least three business days beforehand so there are no surprises.

What are closing costs, and how much should I expect?

Closing costs are the fees associated with originating and closing the loan: lender fees, title insurance, recording fees, prepaid taxes and insurance, and similar items. They typically run 2% to 5% of the loan amount. You'll see an itemized estimate within three business days of applying.

Can I lock my interest rate?

Yes. A rate lock holds your quoted rate for a set period, typically 30, 45, or 60 days, protecting you from increases during processing. When to lock is a judgment call that depends on your timeline, your loan, and where the market is heading. It's one of the first things worth discussing with your loan officer.

The Loan Process

From application to closing: what happens, when, and what we'll need from you.

What documents will I need to provide?

At a minimum: recent pay stubs, two years of W-2s or tax returns, two months of bank statements, ID, and authorization to pull credit. Self-employed borrowers, retirees, and borrowers with investment income will need additional documentation. After your first conversation, we'll send a checklist built for your situation instead of a generic one.

What's underwriting, and what are they looking for?

Underwriting is the formal review of your file against the loan program's guidelines. The underwriter verifies your income, assets, credit, and the property itself, and confirms the loan meets investor and regulatory standards. Most underwriting decisions come back within a few business days of a complete file.

What is an appraisal, and who pays for it?

An appraisal is an independent valuation of the property, ordered through a third-party management company to keep it impartial. The borrower pays for it, typically $500 to $700 depending on the market and property type. The appraisal protects you and the lender from overpaying.

What happens if the appraisal comes in low?

A low appraisal means the property appraised for less than the purchase price. You have options: renegotiate the price with the seller, bring additional cash to cover the gap, dispute the appraisal with supporting comparable sales, or walk away if your contract allows. We'll walk you through which path makes sense for your situation.

What is an escrow account?

An escrow account is a holding account your lender uses to pay your property taxes and homeowners insurance on your behalf. A portion of your monthly mortgage payment goes into escrow, and the lender pays the bills when they come due. This keeps your taxes and insurance current without you having to manage large lump-sum payments.

What happens at closing?

At closing, you'll sign the final loan documents, pay your down payment and closing costs, and receive the keys. Closings typically take an hour and happen at a title company office or, in some states, remotely. We'll send a closing disclosure at least three business days beforehand so there are no surprises.

What are closing costs, and how much should I expect?

Closing costs are the fees associated with originating and closing the loan: lender fees, title insurance, recording fees, prepaid taxes and insurance, and similar items. They typically run 2% to 5% of the loan amount. You'll see an itemized estimate within three business days of applying.

Can I lock my interest rate?

Yes. A rate lock holds your quoted rate for a set period, typically 30, 45, or 60 days, protecting you from increases during processing. When to lock is a judgment call that depends on your timeline, your loan, and where the market is heading. It's one of the first things worth discussing with your loan officer.

Loan Types & Programs

A quick orientation to the most common loan types and who they're built for.

What's the difference between a fixed-rate and adjustable-rate mortgage?

A fixed-rate mortgage keeps the same interest rate for the life of the loan. An adjustable-rate mortgage (ARM) starts with a fixed rate for an initial period, usually 5, 7, or 10 years, then adjusts periodically based on a market index. Fixed-rate loans offer predictability; ARMs can offer a lower initial rate when you don't plan to stay in the home long-term.

What is an FHA loan?

An FHA loan is insured by the Federal Housing Administration and designed to make homeownership more accessible. It allows lower down payments (as little as 3.5%) and more flexible credit requirements than conventional loans. FHA loans carry mortgage insurance for the life of the loan in most cases.

What is a VA loan?

VA loans are guaranteed by the Department of Veterans Affairs and available to eligible active-duty service members, veterans, National Guard and Selected Reserve members, and qualifying surviving spouses. They offer 0% down payment and no monthly mortgage insurance. Eligibility is based on length and character of service.

What is a USDA loan?

USDA loans are backed by the U.S. Department of Agriculture and designed for buyers in eligible rural and suburban areas. They offer 0% down payment and reduced mortgage insurance costs, with income limits that vary by location and household size.

What is a conventional loan?

A conventional loan is a mortgage that isn't backed by a government program. It typically requires stronger credit and a higher down payment than FHA, but it offers more flexibility, including the ability to drop mortgage insurance once you reach 20% equity. Most buyers with good credit and steady income end up in conventional loans.

What is a jumbo loan?

A jumbo loan exceeds the conforming loan limits set annually by federal regulators. Because they're larger and not backed by Fannie Mae or Freddie Mac, jumbo loans typically require stronger credit, larger down payments, and more documentation. They're common in higher-cost markets and for higher-priced properties.

Are there special programs for first-time buyers?

Yes. Several loan programs are designed specifically for first-time buyers, including low down payment options and down payment assistance programs that vary by state. Eligibility is broader than the label suggests: "first-time buyer" often includes anyone who hasn't owned a home in the past three years.

What's a bridge loan?

A bridge loan is short-term financing that lets you buy a new home before selling your current one. It bridges the gap between the two transactions so you're not stuck making a contingent offer or moving twice. Bridge loans are useful in competitive markets but carry higher costs than traditional mortgages.

Loan Types & Programs

A quick orientation to the most common loan types and who they're built for.

What's the difference between a fixed-rate and adjustable-rate mortgage?

A fixed-rate mortgage keeps the same interest rate for the life of the loan. An adjustable-rate mortgage (ARM) starts with a fixed rate for an initial period, usually 5, 7, or 10 years, then adjusts periodically based on a market index. Fixed-rate loans offer predictability; ARMs can offer a lower initial rate when you don't plan to stay in the home long-term.

What is an FHA loan?

An FHA loan is insured by the Federal Housing Administration and designed to make homeownership more accessible. It allows lower down payments (as little as 3.5%) and more flexible credit requirements than conventional loans. FHA loans carry mortgage insurance for the life of the loan in most cases.

What is a VA loan?

VA loans are guaranteed by the Department of Veterans Affairs and available to eligible active-duty service members, veterans, National Guard and Selected Reserve members, and qualifying surviving spouses. They offer 0% down payment and no monthly mortgage insurance. Eligibility is based on length and character of service.

What is a USDA loan?

USDA loans are backed by the U.S. Department of Agriculture and designed for buyers in eligible rural and suburban areas. They offer 0% down payment and reduced mortgage insurance costs, with income limits that vary by location and household size.

What is a conventional loan?

A conventional loan is a mortgage that isn't backed by a government program. It typically requires stronger credit and a higher down payment than FHA, but it offers more flexibility, including the ability to drop mortgage insurance once you reach 20% equity. Most buyers with good credit and steady income end up in conventional loans.

What is a jumbo loan?

A jumbo loan exceeds the conforming loan limits set annually by federal regulators. Because they're larger and not backed by Fannie Mae or Freddie Mac, jumbo loans typically require stronger credit, larger down payments, and more documentation. They're common in higher-cost markets and for higher-priced properties.

Are there special programs for first-time buyers?

Yes. Several loan programs are designed specifically for first-time buyers, including low down payment options and down payment assistance programs that vary by state. Eligibility is broader than the label suggests: "first-time buyer" often includes anyone who hasn't owned a home in the past three years.

What's a bridge loan?

A bridge loan is short-term financing that lets you buy a new home before selling your current one. It bridges the gap between the two transactions so you're not stuck making a contingent offer or moving twice. Bridge loans are useful in competitive markets but carry higher costs than traditional mortgages.

Rates & Costs

How rates are set, what the loan actually costs, and what you'll need up front.

How are mortgage rates determined?

Mortgage rates respond to the bond market, broader economic conditions, and lender-specific factors. Your individual rate also depends on your credit, loan amount, down payment, property type, and the loan program. Rates can move daily, sometimes more than once in a day.

Why don't you publish rates on your website?

A posted rate isn't your rate. Real pricing depends on your credit, the property, the loan structure, and the day you lock. Publishing a generic number would give you information that's either too optimistic or too conservative for your actual situation. We'd rather quote you a real rate based on your real file.

What are discount points?

Discount points are an optional upfront fee you can pay to lower your interest rate. One point equals 1% of the loan amount. Whether points make sense depends on how long you plan to keep the loan. The longer you stay, the more the upfront cost pays off in monthly savings.

How much do I need for a down payment?

You may not need 20% down. Conventional loans can go as low as 3% down for qualifying buyers, FHA as low as 3.5%, and VA and USDA loans require no down payment at all. A larger down payment reduces your monthly payment and can eliminate PMI, but it isn't a prerequisite for buying.

What is PMI, and when do I have to pay it?

Private mortgage insurance (PMI) protects the lender if a borrower with less than 20% equity defaults. It's typically required on conventional loans with less than 20% down and is built into your monthly payment. You can request removal once you reach 20% equity, either through payments or appreciation.

What is down payment assistance?

Down payment assistance (DPA) programs are grants, loans, or forgivable second mortgages that help cover down payment and closing costs. They're offered by state and local agencies and have eligibility rules based on income, location, and sometimes occupation. We can tell you what's available in your area.

What's the difference between interest rate and APR?

The interest rate is what you pay on the loan balance. The APR (annual percentage rate) includes the interest rate plus certain closing costs, expressed as an annualized percentage. APR is meant to help you compare loans on equal footing, though it has limits: it assumes you'll keep the loan for its full term, which most borrowers don't.

Rates & Costs

How rates are set, what the loan actually costs, and what you'll need up front.

How are mortgage rates determined?

Mortgage rates respond to the bond market, broader economic conditions, and lender-specific factors. Your individual rate also depends on your credit, loan amount, down payment, property type, and the loan program. Rates can move daily, sometimes more than once in a day.

Why don't you publish rates on your website?

A posted rate isn't your rate. Real pricing depends on your credit, the property, the loan structure, and the day you lock. Publishing a generic number would give you information that's either too optimistic or too conservative for your actual situation. We'd rather quote you a real rate based on your real file.

What are discount points?

Discount points are an optional upfront fee you can pay to lower your interest rate. One point equals 1% of the loan amount. Whether points make sense depends on how long you plan to keep the loan. The longer you stay, the more the upfront cost pays off in monthly savings.

How much do I need for a down payment?

You may not need 20% down. Conventional loans can go as low as 3% down for qualifying buyers, FHA as low as 3.5%, and VA and USDA loans require no down payment at all. A larger down payment reduces your monthly payment and can eliminate PMI, but it isn't a prerequisite for buying.

What is PMI, and when do I have to pay it?

Private mortgage insurance (PMI) protects the lender if a borrower with less than 20% equity defaults. It's typically required on conventional loans with less than 20% down and is built into your monthly payment. You can request removal once you reach 20% equity, either through payments or appreciation.

What is down payment assistance?

Down payment assistance (DPA) programs are grants, loans, or forgivable second mortgages that help cover down payment and closing costs. They're offered by state and local agencies and have eligibility rules based on income, location, and sometimes occupation. We can tell you what's available in your area.

What's the difference between interest rate and APR?

The interest rate is what you pay on the loan balance. The APR (annual percentage rate) includes the interest rate plus certain closing costs, expressed as an annualized percentage. APR is meant to help you compare loans on equal footing, though it has limits: it assumes you'll keep the loan for its full term, which most borrowers don't.

Credit & Qualification

What lenders look at, and what to do if your situation is less than straightforward.

What credit score do I need to qualify?

Minimums vary by program, and they shift over time. Government-backed programs like FHA are built to work for buyers with lower scores, while conventional loans generally set a higher bar. VA and USDA set no formal minimum, though lenders apply their own standards. A higher score usually means a better rate, but qualifying and getting the best available rate aren't the same thing. Your loan officer can tell you where you stand against current requirements.

What is debt-to-income ratio, and why does it matter?

Debt-to-income (DTI) is the percentage of your gross monthly income that goes to debt payments, including the proposed mortgage. Most loan programs cap DTI in the mid-40s, though exceptions exist. DTI matters because it's the clearest measure of whether a payment is sustainable for you over the long term.

Can I qualify if I'm self-employed?

Yes. Self-employed borrowers typically provide two years of tax returns and a year-to-date profit and loss statement. Underwriters look at net income rather than gross, which sometimes comes as a surprise. We work with self-employed borrowers regularly and can talk through what to expect before you apply.

Can I qualify if I have student loans?

Yes. Student loans are factored into your DTI calculation. The exact treatment depends on the loan program and the repayment status of the loans. Income-driven repayment plans, deferment, and forbearance are all handled differently by different programs.

What if I've had a bankruptcy or foreclosure?

You can still qualify, but there are waiting periods that vary by loan program. Chapter 7 bankruptcy typically requires two to four years of seasoning depending on the program; foreclosures and short sales have their own timelines. Rebuilding credit during the waiting period makes a meaningful difference when you do apply.

How long do I need to have been at my job?

Most programs look for two years of consistent employment, but that doesn't have to be at the same employer. Job changes within the same field are generally fine. Gaps in employment, career changes, and new graduates entering their field all have specific rules we can walk through.

Will applying for other credit affect my mortgage approval?

Yes. Once you're under contract, avoid opening new credit lines, financing furniture or a car, or making large purchases on credit. Lenders re-verify credit before closing, and new debt can change your DTI enough to delay or jeopardize approval.

Can I qualify with a co-borrower?

Yes. Adding a co-borrower combines incomes and assets but also combines debts and credit profiles. A co-borrower with strong credit can help; one with weaker credit can sometimes hurt. We can run scenarios both ways before you apply.

Credit & Qualification

What lenders look at, and what to do if your situation is less than straightforward.

What credit score do I need to qualify?

Minimums vary by program, and they shift over time. Government-backed programs like FHA are built to work for buyers with lower scores, while conventional loans generally set a higher bar. VA and USDA set no formal minimum, though lenders apply their own standards. A higher score usually means a better rate, but qualifying and getting the best available rate aren't the same thing. Your loan officer can tell you where you stand against current requirements.

What is debt-to-income ratio, and why does it matter?

Debt-to-income (DTI) is the percentage of your gross monthly income that goes to debt payments, including the proposed mortgage. Most loan programs cap DTI in the mid-40s, though exceptions exist. DTI matters because it's the clearest measure of whether a payment is sustainable for you over the long term.

Can I qualify if I'm self-employed?

Yes. Self-employed borrowers typically provide two years of tax returns and a year-to-date profit and loss statement. Underwriters look at net income rather than gross, which sometimes comes as a surprise. We work with self-employed borrowers regularly and can talk through what to expect before you apply.

Can I qualify if I have student loans?

Yes. Student loans are factored into your DTI calculation. The exact treatment depends on the loan program and the repayment status of the loans. Income-driven repayment plans, deferment, and forbearance are all handled differently by different programs.

What if I've had a bankruptcy or foreclosure?

You can still qualify, but there are waiting periods that vary by loan program. Chapter 7 bankruptcy typically requires two to four years of seasoning depending on the program; foreclosures and short sales have their own timelines. Rebuilding credit during the waiting period makes a meaningful difference when you do apply.

How long do I need to have been at my job?

Most programs look for two years of consistent employment, but that doesn't have to be at the same employer. Job changes within the same field are generally fine. Gaps in employment, career changes, and new graduates entering their field all have specific rules we can walk through.

Will applying for other credit affect my mortgage approval?

Yes. Once you're under contract, avoid opening new credit lines, financing furniture or a car, or making large purchases on credit. Lenders re-verify credit before closing, and new debt can change your DTI enough to delay or jeopardize approval.

Can I qualify with a co-borrower?

Yes. Adding a co-borrower combines incomes and assets but also combines debts and credit profiles. A co-borrower with strong credit can help; one with weaker credit can sometimes hurt. We can run scenarios both ways before you apply.

After Closing

What happens once the loan funds: payments, servicing, and changes down the road.

Who will I make my mortgage payments to?

Most loans are transferred to a loan servicer within the first few months after closing. The servicer collects your payments, manages your escrow account, and handles customer service for the life of the loan. Federal law requires written notice before a servicing transfer takes effect, so you'll know where to send your payment.

What is loan servicing, and why does it transfer?

Servicing is the ongoing administration of your loan: collecting payments, paying taxes and insurance from escrow, sending statements. Most lenders, including Thompson Kane, transfer servicing to companies that specialize in it. The terms of your loan don't change when servicing transfers. Your rate, your term, and your principal-and-interest payment stay exactly as agreed; only the company you pay changes.

When can I remove PMI?

On conventional loans, you can request PMI removal once you reach 20% equity based on your original purchase price, and it's automatically removed at 22% equity. If your home has appreciated significantly, you may be able to remove PMI sooner by paying for a new appraisal. FHA mortgage insurance generally stays for the life of the loan unless you refinance.

When should I consider refinancing?

Refinancing makes sense when rates have dropped enough to offset the closing costs within a reasonable time, when you want to change loan terms (shorter term, fixed instead of ARM), or when you want to access equity. The break-even math matters more than the rate alone. A small rate drop on a small loan balance may not justify the costs.

Can I pay extra toward principal?

Yes. Additional principal payments reduce your loan balance and the total interest you'll pay over the life of the loan. There are no prepayment penalties on the loans we originate. Even modest extra payments, one extra payment a year or rounding up each month, make a meaningful difference over time.

What happens if I can't make a payment?

Call your servicer as soon as you know there's a problem. Servicers have hardship programs, forbearance, and loan modification options, and all of them work better when you reach out early. Missing payments without telling anyone is the worst outcome. Almost anything else can be worked out.

Will my monthly payment ever change on a fixed-rate loan?

Your principal and interest stay the same, but your escrow portion can change as property taxes and insurance premiums change. Servicers do an annual escrow analysis and adjust the escrow portion of your payment accordingly. This is why your total monthly payment can shift even on a fixed-rate mortgage.

After Closing

What happens once the loan funds: payments, servicing, and changes down the road.

Who will I make my mortgage payments to?

Most loans are transferred to a loan servicer within the first few months after closing. The servicer collects your payments, manages your escrow account, and handles customer service for the life of the loan. Federal law requires written notice before a servicing transfer takes effect, so you'll know where to send your payment.

What is loan servicing, and why does it transfer?

Servicing is the ongoing administration of your loan: collecting payments, paying taxes and insurance from escrow, sending statements. Most lenders, including Thompson Kane, transfer servicing to companies that specialize in it. The terms of your loan don't change when servicing transfers. Your rate, your term, and your principal-and-interest payment stay exactly as agreed; only the company you pay changes.

When can I remove PMI?

On conventional loans, you can request PMI removal once you reach 20% equity based on your original purchase price, and it's automatically removed at 22% equity. If your home has appreciated significantly, you may be able to remove PMI sooner by paying for a new appraisal. FHA mortgage insurance generally stays for the life of the loan unless you refinance.

When should I consider refinancing?

Refinancing makes sense when rates have dropped enough to offset the closing costs within a reasonable time, when you want to change loan terms (shorter term, fixed instead of ARM), or when you want to access equity. The break-even math matters more than the rate alone. A small rate drop on a small loan balance may not justify the costs.

Can I pay extra toward principal?

Yes. Additional principal payments reduce your loan balance and the total interest you'll pay over the life of the loan. There are no prepayment penalties on the loans we originate. Even modest extra payments, one extra payment a year or rounding up each month, make a meaningful difference over time.

What happens if I can't make a payment?

Call your servicer as soon as you know there's a problem. Servicers have hardship programs, forbearance, and loan modification options, and all of them work better when you reach out early. Missing payments without telling anyone is the worst outcome. Almost anything else can be worked out.

Will my monthly payment ever change on a fixed-rate loan?

Your principal and interest stay the same, but your escrow portion can change as property taxes and insurance premiums change. Servicers do an annual escrow analysis and adjust the escrow portion of your payment accordingly. This is why your total monthly payment can shift even on a fixed-rate mortgage.

Ready to start your journey to home ownership?

Ready to start your journey to home ownership?

Ready to start your journey to home ownership?