Frequently Asked Questions

Pre-qualification is an informal estimate based on self-reported financial information — income, debts, and assets — with no credit pull required. It typically takes just a few minutes and gives you a rough idea of what you can afford. Pre-approval, by contrast, is a formal commitment from a lender after verifying your income (W-2s, pay stubs), assets (bank statements), credit history (hard inquiry), and employment. A pre-approval letter is generally valid for 60 to 90 days, per Fannie Mae guidelines. In California's competitive housing markets, sellers strongly prefer offers backed by a pre-approval because it signals verified buying power. NetCORE Lending™ offers free online pre-qualification at netcorelending.com/get-pre-qualified with no impact to your credit score.

Refinancing makes sense when the savings outweigh the costs. A common benchmark is the break-even calculation: divide your closing costs (typically 2% to 5% of the loan amount, per Freddie Mac) by your monthly payment savings to determine how many months it takes to recoup the expense. Many borrowers refinance when they can reduce their rate by at least 0.5% to 1.0%. Other reasons include switching from an adjustable-rate mortgage (ARM) to a fixed rate for payment stability, eliminating private mortgage insurance (PMI) once you reach 80% loan-to-value per the Homeowners Protection Act, or accessing home equity through a cash-out refinance. In California, where median home values are among the highest nationally, even a modest rate reduction can yield substantial monthly savings.

A rate lock is a lender's written guarantee to hold a specific interest rate and discount points for a set period while your loan is processed and underwritten. Common lock periods are 30, 45, or 60 days, though extended locks of up to 180 days are available for new construction purchases. If market rates rise during your lock period, your locked rate is protected. Some lenders offer a float-down option, which allows you to take advantage of a lower rate if rates drop significantly after locking — typically a decrease of 0.25% or more. Rate locks may be free for standard periods, but extended locks often carry a small fee of 0.125% to 0.25% of the loan amount. Your loan officer can advise on the best lock strategy based on your closing timeline.

A lender (such as a bank or credit union) offers only its own loan products at its own posted retail rates. A mortgage broker like NetCORE Lending™ has agreements with 100+ wholesale lenders and can comparison-shop across all of them in real time to find the best rate and program for your specific situation. Because wholesale lenders compete for broker volume, wholesale rates are typically 0.125% to 0.50% lower than retail rates. A broker also provides access to specialized programs — such as non-QM bank-statement loans, DSCR investor loans, and bridge loans — that most banks do not offer. The broker handles the entire process (application, underwriting coordination, closing) at no extra cost to the borrower, since the lender pays the broker's compensation as part of the loan.

Not necessarily — and in many cases, a mortgage broker can save you money. Brokers access wholesale interest rates that are typically lower than the retail rates banks offer directly to consumers. NetCORE Lending™, for example, shops 100+ wholesale lenders to find the most competitive pricing for each borrower. The borrower pays no out-of-pocket broker fee; the selected lender pays the broker's compensation as part of the loan through lender-paid compensation, which is standard in the broker industry. Per the Consumer Financial Protection Bureau (CFPB), borrowers should compare Loan Estimates from multiple sources. When you do, you will often find that a broker's wholesale-plus-compensation rate is equal to or lower than a single bank's retail quote — with the added benefit of having more loan program options to choose from.

A full documented (full-doc) loan is a mortgage where the borrower provides complete verification of income, assets, and employment. Per Fannie Mae and Freddie Mac Selling Guide requirements, standard documentation includes: W-2 wage statements from the past two years, federal tax returns (two years), recent pay stubs covering at least 30 days, and bank or investment account statements from the past two to three months. Self-employed borrowers typically provide two years of personal and business tax returns plus a year-to-date profit-and-loss statement. Full-doc loans generally offer the lowest interest rates and most favorable terms because the lender has complete verification of the borrower's ability to repay. Most conventional, FHA, and VA loans are full-doc loans. Alternative documentation options exist for borrowers who cannot meet these requirements — see Non-QM loans.

Beyond traditional full-doc mortgages, several alternative loan programs exist for borrowers who cannot document income through conventional means. Non-QM (non-qualified mortgage) bank-statement loans let self-employed borrowers qualify using 12 or 24 months of personal or business bank statements instead of tax returns. DSCR (Debt Service Coverage Ratio) loans are designed for real estate investors — qualification is based on the property's rental income relative to the mortgage payment, with no personal income documentation required. Asset-depletion loans allow borrowers to qualify based on liquid assets rather than income. Foreign national loans serve non-U.S. citizens purchasing property in the United States. Rates on these alternative programs are typically 0.5% to 1.0% higher than conventional loans, per current market conditions. NetCORE Lending™ offers all of these programs through its network of 100+ wholesale lenders.

A Good Faith Estimate (GFE) was a document from the lender that itemized all estimated costs associated with obtaining a mortgage, including origination fees, appraisal costs, title insurance, and prepaid items. As of October 3, 2015, the GFE was replaced by the Loan Estimate form under the TILA-RESPA Integrated Disclosure (TRID) rule, per the Consumer Financial Protection Bureau (CFPB). The new Loan Estimate is a standardized three-page form that lenders must provide within three business days of receiving a loan application. It clearly discloses the loan terms, projected monthly payments, estimated closing costs, and cash needed to close. The standardized format makes it easier for borrowers to compare offers from multiple lenders side by side. At closing, borrowers receive a Closing Disclosure at least three business days before signing, which shows the final loan terms and costs.

A conforming loan is a mortgage that meets the eligibility guidelines set by Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that purchase and guarantee most U.S. residential mortgages. These guidelines cover maximum loan amounts, borrower credit requirements, down payment minimums, and documentation standards. Per the Federal Housing Finance Agency (FHFA), the 2025 baseline conforming loan limit is $806,500 for most U.S. counties. In designated high-cost areas — which include much of California, including Los Angeles, Orange, San Francisco, and San Mateo counties — the limit rises to $1,209,750. Conforming loans typically offer the lowest available interest rates and most flexible terms because Fannie Mae and Freddie Mac's guarantee reduces lender risk. Minimum credit score is generally 620, per Fannie Mae guidelines, with down payments as low as 3% for first-time homebuyers.

A jumbo mortgage is a home loan that exceeds the conforming loan limits set by the FHFA. In most U.S. counties the 2025 conforming limit is $806,500, while California high-cost counties have a ceiling of $1,209,750 — any loan above these thresholds is classified as jumbo. Because jumbo loans cannot be purchased or guaranteed by Fannie Mae or Freddie Mac, lenders retain more risk and therefore impose stricter qualification requirements. Borrowers typically need a minimum credit score of 700 to 720, a down payment of 10% to 20%, and cash reserves of 6 to 12 months of mortgage payments. Debt-to-income ratios are generally capped at 43%, per most jumbo lender guidelines. Despite these requirements, jumbo rates have been competitive with conforming rates in recent years. NetCORE Lending™ shops jumbo programs across 100+ lenders to find the best pricing.

Mortgage points are upfront fees paid at closing, where one point equals 1% of the loan amount. There are two types: discount points and origination points. Discount points are prepaid interest that buy down your interest rate — for example, on a $500,000 loan, one discount point costs $5,000 and typically reduces the rate by approximately 0.25%, per Freddie Mac estimates. Origination points are lender fees for processing the loan. The key decision is break-even: divide the point cost by the monthly savings to determine how many months it takes to recoup the expense. If you plan to stay in the home beyond the break-even period, paying points can save significant money over the life of the loan. Per the IRS, discount points paid on a primary residence purchase may be fully tax-deductible in the year of purchase (consult a tax advisor for your situation).

Pre-qualification is an informal, preliminary assessment where a lender reviews basic financial information you provide — such as estimated income, monthly debts, assets, and desired loan amount — to estimate how much home you may be able to afford. No hard credit pull is performed, so there is no impact to your credit score (it is a soft inquiry only). Pre-qualification can typically be completed in minutes, either online or over the phone. While it does not carry the same weight as a pre-approval with sellers, it is a valuable first step for understanding your purchase power and identifying which loan programs you may qualify for. NetCORE Lending™ offers free online pre-qualification at netcorelending.com/get-pre-qualified, which provides an instant estimate of your buying power and recommended loan programs with no obligation or commitment.