Mortgage FAQs

J.G. Wentworth is here to make the process of choosing a mortgage easier for you. Here, we will answer some of the most common questions about home loans.

What is the first step of the mortgage process?

When you submit an application for a mortgage, J.G. Wentworth will run your credit score and evaluate your finances to determine what types of loans you qualify for.

What is my credit score?

A credit score is a number based on an analysis of your credit files. It is used to represent an individual’s “creditworthiness.”

You can obtain a copy of your credit score from three major credit reporting agencies -- Equifax, Experian, and TransUnion. If you check your credit score from all three reporting agencies, you’ll have a better chance of spotting inconsistencies and inaccuracies. When you apply for a mortgage, one of the first things we will do is pull your credit score. Every type of loan has a different credit score requirement, so contact one of our loan specialists today to see how your credit score ranks. 

What if I have outstanding balances on my credit cards?

To qualify for a mortgage, you don’t need a zero balance on your credit card. We will consider your debt-to-income ratio when it is time to determine mortgage loan approval and amounts. 

How much should my down payment be?

It is recommended to make a down payment of 20 percent of the home’s purchase price. However, it depends on what type of loan you are qualifying for, as some government-backed loan programs, like FHA loans, require down payments as little as 3.5 percent, or even less. With VA loans and USDA loans, you may be able to finance a home without making a down payment at all. Keep in mind that making a larger down payment may help you get a better interest rate.

What are closing costs?

Closing costs are the fees associated with purchasing a home that are paid at the time you close on your home. Closing costs are usually approximately 3 percent of your home’s purchase price. These costs can include fees from the application, home inspection, Private Mortgage Insurance (PMI), underwriting, title insurance, appraisal costs, etc. 

What is included in my monthly payments?

Monthly mortgage payments typically include principal and interest. Your mortgage payments can also include Private Mortgage Insurance (PMI). If you have an escrow account, a portion of your monthly payments can include property taxes and homeowners insurance. 

What is Private Mortgage Insurance (PMI), and do I need it?

Private Mortgage Insurance, or PMI, is a type of mortgage insurance you could potentially be required to pay when you obtain a mortgage. It is usually required if you have a conventional loan and make a down payment that is less than 20 percent of your home’s purchasing price. You may also need to pay PMI if you are refinancing. 

What’s the difference between interest rate and APR?

An interest rate is the cost to borrow the loan amount, represented as a percentage. 

The APR is calculated by taking the interest rate and any fees related to the loan into account to produce a percentage that must be paid every year, creating a more accurate picture of the total amount you will be paying. 

Should I get pre-qualified or pre-approved?

Getting pre-qualified for a loan can be a great tool when you start looking at homes since it can help you get an idea of how much you can borrow. To pre-qualify, you will review your financial information with one of our loan specialists. Based on that information, we will provide you with an estimate of how much you can potentially borrow. 

When you’re ready to make an offer on a home, it’s time to get pre-approved. For pre-approval, you will submit a formal application, and we will run a credit check. Getting pre-approved can significantly help your chances when you go to put an offer down on a house. 

Should I get a fixed-rate mortgage or an adjustable-rate mortgage (ARM)?

Mortgages are not one-size-fits-all. Deciding what type of mortgage should be determined after considering how a type of mortgage aligns with your lifestyle and financial goals. 

A fixed-rate mortgage has an interest rate that remains the same throughout the life of the loan. With a consistent interest rate, monthly mortgage payments will stay the same as well. 

An adjustable-rate mortgage (ARM) will have a set interest rate for an initial, fixed period. The fixed period can usually last for 3, 5, or 7 years. Once the initial period ends, interest rates can rise or fall depending on market conditions. 

Can J.G. Wentworth help with a mortgage?

J.G. Wentworth is a direct mortgage lender that helps customers through every step of the mortgage process. We offer a variety of different loan options for customers to choose from, and our knowledgeable loan specialists are ready to answer any questions. Through the use of innovative technology, we are able to provide a streamlined process and timely loan turnarounds. J.G. Wentworth is proud to offer low mortgage rates and loans with no points or hidden fees. Contact us today to speak to one of our home loan specialists.