Our FAQs

Mortgage brokers are independent, licensed professionals who are trained to offer expert advice and find the best mortgage options for your needs.

Without a broker, you'd be left with the time-consuming task of contacting multiple lenders and comparing rates and terms yourself. A broker takes that hassle off your plate by doing the legwork for you. They have ongoing relationships with a wide range of lenders, including some you might not even be aware of, giving you access to more options.

The cost of a loan goes beyond just the lender's fees—it also includes fees from third-party vendors. These can cover things like appraisals, credit reports, title policies, pest inspections, escrow (if applicable), recording fees, and taxes.

These fees should be accurately detailed in a document called the Loan Estimate, which federal law requires the lender to provide. This document must be given to you once the loan application is completed and should include key details like the borrower’s name, Social Security number, property address, estimated property value, loan amount, and the borrower’s income.

The amount of down payment required to purchase a home can vary depending on several factors, such as the type of loan, the lender’s requirements, and your financial situation. Here are some common options:

1. Conventional Loans: Typically, lenders require a down payment of at least 3% to 20% of the home's purchase price. A 20% down payment allows you to avoid Private Mortgage Insurance (PMI).
2. FHA Loans: These loans, backed by the Federal Housing Administration, often require as little as 3.5% down, making them a popular choice for first-time buyers or those with lower credit scores.
3. VA Loans: For qualified veterans, active-duty military personnel, and certain members of the National Guard, VA loans may allow for a 0% down payment, with no PMI requirement.
4. USDA Loans: These loans, designed for rural and some suburban areas, also offer a 0% down payment option for eligible buyers.
5. Down Payment Assistance (DPA) Programs: DPA programs provide financial assistance to homebuyers to help cover the down payment and/or closing costs. These programs are often offered by local or state governments and nonprofits, and may offer grants, forgivable loans, or low-interest loans, particularly for first-time homebuyers or those meeting specific income qualifications.

Your down payment will depend on your financial situation and the loan program you're using. Additionally, a larger down payment can sometimes help secure better loan terms, like lower interest rates or reduced mortgage insurance costs. It’s worth exploring DPA programs if you qualify, as they can significantly reduce your out-of-pocket expenses.

The annual percentage rate (APR) of a loan is calculated using a formula that factors in both the interest rate and any associated lender fees, divided by the loan term. However, not all brokers calculate APR accurately, and it’s nearly impossible to determine an exact APR for adjustable-rate loans. Additionally, APR doesn’t account for early payoffs.

When speaking with your mortgage lender, be sure to ask about the adjustment frequency for adjustable-rate loans, the maximum possible annual adjustment, the rate cap, the index used, and the margin. These details can help you better understand how your loan might change over time.

The property is officially transferred from the seller to you at “Closing” or “Funding”.

At closing, the ownership of the property is officially transferred from the seller to you. This may involve you, the seller, real estate agents, your attorney, the lender’s attorney, title or escrow firm representatives, clerks, secretaries, and other staff. You can have an attorney represent you if you can’t attend the closing meeting, i.e., if you’re out-of-state. Closing can take anywhere from 1-hour to several depending on contingency clauses in the purchase offer, or any escrow accounts needing to be set up.

Most paperwork in closing or settlement is done by attorneys and real estate professionals. You may or may not be involved in some of the closing activities; it depends on who you are working with.

Prior to closing you should have a final inspection, or “walk-through” to insure requested repairs were performed, and items agreed to remain with the house are there such as drapes, lighting fixtures, etc.

In most states the settlement is completed by a title or escrow firm in which you forward all materials and information plus the appropriate cashier’s checks so the firm can make the necessary disbursement. Your representative will deliver the check to the seller, and then give the keys to you.

On a conventional mortgage, when your down payment is less than 20% of the purchase price of the home mortgage lenders usually require you get Private Mortgage Insurance (PMI) to protect them in case you default on your mortgage. Sometimes you may need to pay up to 1-year’s worth of PMI premiums at closing which can cost several hundred dollars. The best way to avoid this extra expense is to make a 20% down payment, or ask about other loan program options.

Below is a list of documents that are required when you apply for a mortgage. However, every situation is unique and you may be required to provide additional documentation. 

Personal:

• Name, Date of Birth, and Social Security Number for each borrower
• Addresses where you have lived for the past two years (also the names and addresses of your landlords if you have been renting)

Income:

• Most recent 30-day pay stubs
• Last two years of W-2 forms (1099's, if applicable)
• Employer names and addresses for the past two years, as well as the length of time spent at each job Letter explaining any gaps in employment in the past 2 years
• Work visa or green card (copy front & back)
• Last two years of federal tax returns (with all Schedules) of any income earned, if based on commissions or bonuses
• Alimony or Child Support to qualify: Provide divorce decree/court order stating amount, as well as, proof of receipt of funds for last year
• Social Security income, Disability or VA benefits: Provide most recent award letter from agency or organization
• Rental income: copy of lease(s) and last two years of tax returns with Schedule E

Source of Funds and Down Payment:

• Sale of your existing home – provide a copy of the signed sales contract on your current residence and closing disclosure statement or listing agreement if unsold (at closing, you must also provide a signed/dated Closing Disclosure Statement)
• Savings, checking or money market funds – provide copies of bank statements for the last 2 months
• Stocks, Bonds and Bitcoins – provide copies of your statement from your broker or copies of certificates for the last 2 months
• Gifts – If part of your cash to close, provide Gift Affidavit and proof of receipt of funds

Debt or Obligations:

• Names, account numbers, current balances, and monthly payments on all outstanding loans and active, revolving charge accounts (credit cards, gas cards, student loans, etc.)
• Paying alimony or child support: provide marital settlement/court order stating the terms of the obligation
• Thin credit profile or new credit profile, will need 3 non-traditional credit references with a 12-month history
• Copy of divorce decree and/or separation agreement, if applicable
• Name, address of lender, and account number on all property you own

Bankruptcy and/or Adverse Credit:

• Bankruptcy discharge and all Schedules
• Information on any other adverse credit (judgments, collections, liens, etc.)

There may be additional documents required, but this checklist is a start to help keep you organized.

Call Ark of Finance today, and we’ll help walk you through the steps to apply for a home loan.

Ark of Finance specializes in tailored loan services designed to meet your specific needs. Whether you're looking for a mortgage loan, business loan, land lots or commercial loan, our experienced team will work with you to find the best solution for your financial goals.

The HomeReady Bootcamp program is a comprehensive 3-day workshop designed to equip you with the knowledge and tools you need to achieve homeownership. From mortgage basics to finding the perfect property, our program covers all aspects of the home-buying process in an engaging and interactive format.

Yes! You’ll need a gift letter confirming the money isn’t a loan, plus the giver’s name, relationship, and amount. Your lender may have specific rules, so always double-check.

Pre-qualification is an estimate based on what you tell the lender — no documents required. Pre-approval is stronger: the lender reviews your credit, income, and assets, making it more reliable when shopping for a home.

DTI compares what you owe each month to what you earn. A lower DTI makes you a stronger loan candidate. High DTI could mean higher interest rates or a denial.

It improves your credit score and lowers your DTI — both boost your chances of getting approved with better terms.

It’s how much of your credit you’re using. Lower is better — try to stay under 30% of your limit to help your score.

Pay down debts, keep balances low, don’t open new accounts, and fix any errors on your credit report.

Yes, but you may face higher rates and fewer options. Some lenders work with lower scores, but improving your credit first gives you better terms.

Yes, they can. Even if paused, lenders still factor them into your debt-to-income ratio. Know how your loans are being reported.

Different sites use different scoring models (FICO®, VantageScore®, etc.) and may pull from different bureaus. Focus on the trend, not just one number.

If they don’t respond within 30–45 days, they must remove the item. We track this and take next steps to protect your rights and push for results.

No — and legally, no one can. But we fight hard to remove inaccurate, outdated, or unverifiable items. Many clients still see major score boosts within 90 days.

We’ll review your reports, file disputes, and give you steps to help rebuild. You’ll get updates, support, and education along the way.

Usually 3–6 months, depending on your file. Some see faster results, others take longer. It depends on how many items you have and how fast the bureaus respond.

Yes, under the FCRA, everything reported must be 100% accurate and verifiable. If it’s not, it can legally be removed.

No. Online disputes often waive your rights and create no paper trail. Always dispute in writing to protect yourself and build leverage.

No. Credit sweeps are illegal unless it’s actual identity theft. We only use legal, factual methods that protect you.

• 35% Payment History
• 30% Credit Utilization
• 15% Credit Age
• 10% Credit Mix
• 10% Inquiries

Anything inaccurate, outdated, or unverified — like late payments, collections, charge-offs, bankruptcies, tax liens, and more. Even valid items may be removed if they can’t be verified properly.

Usually not. Closing a card lowers your total available credit, which can raise your utilization ratio and drop your score. It may also shorten your credit history. Unless there’s a specific reason, it’s better to keep cards open — even if unused.

Not all creditors report to all three bureaus — and even when they do, updates may post at different times. That’s why reports from Equifax, Experian, and TransUnion often show different data. We check all three to fix errors and ensure accuracy.

If verified, the item stays — but we can still challenge it. We may submit new evidence, demand deeper verification, or negotiate with the creditor directly. We don’t stop until every legal option is explored to help your score.

Go to AnnualCreditReport.com. You’re entitled to one free report per bureau each year. Reviewing them helps you catch errors and get mortgage-ready in advance.