Loan FAQ Library

Credit

How does bankruptcy affect my ability to get a loan?

Bankruptcy significantly impacts loan eligibility but does not permanently prevent borrowing. After Chapter 7 bankruptcy discharge, FHA loan waiting periods are 2 years; VA loans a...

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Credit

What is a credit-builder loan and how does it work?

A credit-builder loan is designed specifically to help people with no credit or damaged credit establish a positive payment history. Unlike traditional loans, you do not receive th...

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Scams

What is an advance-fee loan scam?

An advance-fee loan scam promises guaranteed loan approval in exchange for upfront payment of fees — labeled as insurance, processing, taxes, or administration costs. Once you pa...

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Scams

How do I identify a predatory lender?

Predatory lenders use deceptive or abusive practices to trap borrowers in unfair loans. Warning signs include: extremely high interest rates or fees not clearly disclosed; pressure...

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Scams

What is mortgage rescue fraud?

Mortgage rescue fraud targets homeowners facing foreclosure by offering fake help. Scammers may promise to negotiate with your lender, modify your loan, or save your home from fore...

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Scams

What are red flags of a loan modification scam?

Red flags of a loan modification scam include: companies asking for upfront fees before helping you (illegal in many states); being told to stop communicating with your mortgage se...

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Scams

How do I verify if a lender is legitimate and licensed?

To verify a mortgage lender's legitimacy, check their license status on the NMLS Consumer Access website (nmlsconsumeraccess.org), which is the official national database for licen...

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Scams

What is equity stripping fraud?

Equity stripping is a predatory scheme designed to steal the equity homeowners have built up in their property. In a typical scheme, a distressed homeowner is offered a 'rescue' lo...

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Scams

What is a bait-and-switch mortgage scheme?

A bait-and-switch mortgage scheme involves a lender advertising very attractive loan terms (low rates, no fees) to lure borrowers in, then changing the terms at or near closing. Bo...

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Scams

What should I do if I suspect I am being scammed by a lender?

If you suspect loan fraud, take these steps immediately: stop all payments and communication with the suspected scammer; document everything — save all emails, texts, contracts,...

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Scams

What is deed theft and how can I protect myself?

Deed theft (also called home title fraud) occurs when a criminal forges documents to transfer ownership of your property into their name without your knowledge. Once the deed is fr...

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Scams

How can I report a fraudulent lender?

Fraudulent lenders can be reported to multiple agencies: the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint handles mortgage and loan complaints; the...

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Loan basics

What is a mortgage?

A mortgage is a loan used to purchase or refinance real estate, where the property itself serves as collateral. The borrower agrees to make monthly payments over a set term (typica...

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Loan basics

What credit score do I need to buy a home?

The minimum credit score depends on the loan type:FHA Loan: 500 minimum (580+ for 3.5% down)VA Loan: No official minimum (lenders typically require 620+)Conventional: 620 minimumJu...

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Loan basics

How much can I borrow for a home loan?

Your maximum loan amount depends on several factors:Debt-to-Income (DTI) ratio: Most lenders want your total monthly debt (including new mortgage) below 43-45% of gross monthly inc...

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