How Do We Choose the Right Mortgage? 5 Questions We Ask Every Homebuyer

laisewearefair
11 minutes ago
3 min read

One of the biggest misconceptions about getting a mortgage is that there's only one type of home loan.

In reality, there are dozens of mortgage programs, and choosing the right one isn't about finding the "best" loan—it's about finding the one that best fits your financial profile.

At Fair Mortgage Lending, we don't start with the loan.

We start with you.

Here are the five questions we ask every borrower before recommending a mortgage program.

1. What Is Your Immigration Status?

Your residency status plays an important role in determining which loan programs are available.

For example, many traditional Qualified Mortgages (QM) are designed for:

U.S. Citizens
Permanent Residents (Green Card holders)
Certain visa holders who meet agency guidelines

However, if you're a foreign national, have a temporary visa, or don't yet have a clear path to permanent residency, you may still have financing options through certain Non-QM loan programs.

Example:

A Brazilian investor purchasing a vacation home in Florida may qualify for a Foreign National mortgage without having a Green Card or U.S. income.

The available options depend on the lender and the loan program.

2. How Is Your Income Earned?

This is often the most important question.

If you're a W-2 employee with consistent paychecks, a traditional QM loan may be the best fit.

But not everyone earns income the same way.

Many borrowers are:

Self-employed
Business owners
Freelancers
Real estate investors
Commission-based professionals

If your tax returns don't accurately reflect your financial strength, alternative documentation may provide more flexibility.

Examples include:

Bank Statement Loans
Profit & Loss (P&L) Loans
Asset Depletion Loans
DSCR Loans for investment properties

Example:

A business owner may generate $300,000 per year in revenue but report only $110,000 in taxable income after legitimate business deductions.

A traditional lender may qualify them using the lower amount, while a Bank Statement loan may better reflect their actual cash flow.

3. How Much Are You Planning to Put Down?

Your down payment influences both the loan programs available and your financing terms.

Traditional QM Loans

Qualified buyers may purchase a primary residence with:

3% down (certain Conventional programs)
3.5% down (FHA)
5% down (many Conventional options)
0% down for eligible VA and USDA borrowers

Non-QM Loans

Because these loans involve more flexible underwriting, they typically require larger down payments.

Common guidelines include:

Around 10% or more for primary residences
20% or more for many investment properties

Exact requirements vary depending on the program, property type, and borrower profile.

4. What Does Your Credit Profile Look Like?

Your credit score affects much more than loan approval.

It can also influence:

Interest rate
Down payment requirements
Available loan programs
Mortgage insurance costs

Many government-backed QM programs accept credit scores beginning around 580, while Conventional financing often benefits from higher scores.

Many Non-QM programs prefer scores around 640 or above, although some may allow lower scores with additional down payment or compensating factors.

The stronger your credit profile, the more financing options you'll typically have.

5. What Type of Property Are You Buying?

Not every mortgage works equally well for every property.

For example:

Primary Residences

Traditional QM loans are commonly used for:

Single-family homes
Townhomes
Many condominiums that meet agency approval requirements

Investment Properties

Investors often benefit from specialized Non-QM programs, including DSCR loans that qualify based on the property's rental income.

Some Non-QM lenders are also more flexible with condominium financing, unique property types, or borrowers purchasing multiple investment properties.

Every property is different, which is why reviewing the address with your lender early in the process is important.

There's No "Best Mortgage"—Only the Best Mortgage for You

Two buyers purchasing the same $500,000 home may qualify for completely different loan programs.

One may benefit from a Conventional QM loan with a low down payment.

The other may achieve a better outcome using a Bank Statement or DSCR loan.

That's why choosing a mortgage shouldn't start with comparing interest rates.

It should start with understanding your financial profile and matching it to the right financing strategy.

The right loan can save you money, simplify the approval process, and help you reach your homeownership or investment goals with confidence.

Need Help Choosing the Right Loan?

Whether you're a first-time homebuyer, self-employed, purchasing an investment property, or relocating to Florida, the team at Fair Mortgage Lending can help you compare your options and determine which mortgage program best fits your situation.