Tools, checklists, and straight answers.
Everything you need to prepare for a mortgage — plus curated Colorado and Florida down-payment assistance links, document checklists, and honest Q&A for buyers, sellers, investors, and self-employed borrowers.
Buying Your First Home — the financing roadmap
Buying your first home is a financing project as much as a house hunt. Here's the order we run it in — and where each step usually goes sideways when it's skipped.
- 1Know your numbers
Pull your credit, list every monthly debt, and set a payment you're genuinely comfortable with — not just the maximum a lender will approve.
Run the payment calculator - 2Build your down payment & reserves
Plan for the down payment plus 2–5% for closing costs and a cushion after closing. Gift funds and assistance programs can fill the gap.
CFPB: how much to save - 3Get pre-approved (not just pre-qualified)
A fully underwritten pre-approval verifies income and assets up front, so your offer competes like cash and your closing timeline holds.
Start your application - 4Compare loan options and lenders
Conventional, FHA, VA, USDA, and jumbo each price differently. Compare Loan Estimates side by side — rate, APR, points, and lender fees.
CFPB: explore loan options - 5Shop for the home & write the offer
Your agent and I coordinate on financing terms, appraisal and inspection contingencies, seller credits, and a realistic closing date.
Talk through your offer - 6Underwriting, appraisal & rate lock
Send documents quickly, avoid new credit or large deposits, and lock your rate for a window that covers your contract date.
CFPB: closing checklist - 7Review the Closing Disclosure & close
You receive the CD at least three business days before closing. Compare it line by line to your Loan Estimate and ask about anything that moved.
CFPB: Closing Disclosure explainer
Helpful links for new homebuyers
The federal government's neutral, ad-free homebuying guide from budgeting through closing day.
An interactive, line-by-line walkthrough of the form every lender must give you within 3 business days.
Printable checklists for each stage of the process so nothing slips between contract and keys.
Free or low-cost first-time buyer education — required for most down-payment assistance programs.
Free online homeownership education course accepted by many lenders and DPA programs.
What lenders may and may not consider — and how to report discrimination if it happens.
Links open on third-party government or agency sites. Zero Point Mortgage Services does not administer these programs and is not responsible for their content.
Document Checklists
Have these ready before we submit — clean files close faster and get better pricing. Not every item applies to every borrower; we'll tailor the list on our intro call.
- •Last 2 years W-2s and 2 most recent pay stubs (covering 30 days).
- •Last 2 months' bank / asset statements (all pages, even blank ones).
- •Photo ID and Social Security card or ITIN letter.
- •Landlord contact or 12 months of canceled rent checks (if renting).
- •2 years personal + business tax returns (all schedules / K-1s).
- •YTD Profit & Loss and Balance Sheet (CPA-prepared preferred).
- •12–24 months business or personal bank statements (for bank-statement loans).
- •Business license, operating agreement, or CPA letter verifying ownership %.
- •Lease agreements or an appraiser 1007 rent schedule.
- •Insurance quote (dwelling + liability, replacement cost).
- •LLC docs: articles, operating agreement, EIN letter, certificate of good standing.
- •Schedule of Real Estate Owned (REO) with balances and payments.
- •Employment contract or offer letter (start date within 60–90 days OK).
- •Diploma, license, or DEA registration proving degree status.
- •Student loan statements (IBR / deferred payments are usually allowed).
- •Last 2 pay stubs if already employed.
Down-Payment Assistance (Colorado & Florida)
Curated, verified links to the programs we use most. Eligibility, income caps, and funding availability change frequently — always confirm current terms with the agency or with us before writing an offer.
Colorado's primary DPA program — up to 3% or 4% grants and second-lien assistance for FHA/VA/USDA/Conventional.
Up to 5% forgivable down-payment assistance across most Denver-metro counties (income limits apply).
Second-lien and forgivable DPA for FL buyers, plus expanded eligibility for essential workers.
Free HUD-approved homebuyer education — required for most DPA and first-time buyer programs.
Confirm whether a property qualifies for 0% down USDA financing.
Confirm entitlement, request your Certificate of Eligibility, and review VA loan benefits.
Links open on third-party government or agency sites. Zero Point Mortgage Services does not administer these programs and is not responsible for their content or availability.
Financing FAQ
Common questions about how mortgage financing works — from pre-approval and appraisals to points, escrow, and closing costs. Tap a question to expand the answer.
What's the difference between pre-qualified and pre-approved?+
Pre-qualification is a quick estimate based on what you tell us. Pre-approval means we've reviewed your credit, income, and assets and issued a written letter showing sellers you can close. Pre-approval carries far more weight in a competitive offer.
Fixed-rate or adjustable-rate mortgage — which is better?+
Fixed-rate keeps the same payment for the life of the loan, ideal if you plan to stay long-term. ARMs start lower for a set period (3/7/10 years), then adjust — better if you expect to sell or refinance before the adjustment.
What is PMI and how can I avoid it?+
PMI (Private Mortgage Insurance) protects the lender if you put less than 20% down on a conventional loan. You can avoid it by putting 20% down, choosing a piggyback second lien, or using a VA or physician loan that doesn't require it.
What is an escrow account?+
Escrow collects a portion of your property taxes and homeowners insurance with each monthly payment, then pays those bills when they come due. It helps you budget and avoids large annual lump sums.
What are closing costs?+
Closing costs include lender fees, appraisal, title work, insurance, taxes, prepaids, and recording fees. They typically range from 2% to 5% of the loan amount, depending on loan type and location.
What is debt-to-income ratio (DTI)?+
DTI is your total monthly debt payments divided by your gross monthly income. Most programs cap total DTI around 43–50%, but investor, bank-statement, and physician loans can allow more with compensating factors.
Should I pay discount points?+
Points lower your interest rate in exchange for more upfront cost. They're worth it if you'll keep the loan long enough for the monthly savings to outweigh the extra closing cost. We break even the math for you.
What happens during the appraisal?+
A licensed appraiser inspects the property and compares it to recent sales to confirm the value supports the loan. If the value comes in low, we can renegotiate, cover the gap, or switch programs.
Buyer Q&A
How much home can I actually afford?+
A comfortable rule of thumb is a total housing payment (PITIA) at or below ~28–33% of gross monthly income, and total debts at or below ~43–45%. Investor / DSCR / physician programs can allow more. Run your numbers in the calculator, then let's stress-test it together.
How much do I need for a down payment?+
Conventional: as little as 3%. FHA: 3.5%. VA and USDA: 0% down. Jumbo: typically 10–20%. Colorado (CHFA/metroDPA) and Florida (Hometown Heroes / FL Assist) DPA programs can cover most or all of the down payment for qualified buyers.
What credit score do I need?+
580 for FHA (or 500 with 10% down), 620 for Conventional, no VA minimum (lenders often want 580+), 620–640 for USDA, 680+ for most Jumbo. We work with over 40 lenders — if one says no, another often says yes.
How long does closing take?+
Purchases: 21–30 days is typical, sometimes 14 with a clean file. Refinances: 25–35 days. HELOCs / 2nd liens: often 2–3 weeks.
What is a rate lock?+
A written agreement that fixes your interest rate for a set period (usually 30–60 days) while your loan is processed. If rates drop meaningfully, ask about float-down options.
Seller Q&A
Should I list before buying, or buy first?+
Depends on your equity, cash reserves, and market. Bridge loans, HELOCs, and recasting after sale are three tools we use to bridge the gap so you're not homeless — and not carrying two payments longer than necessary.
Will a buyer's financing fall through?+
Fully underwritten pre-approvals (TBD-property) dramatically reduce fallout risk. Ask your listing agent to require them from offers we haven't pre-approved.
Self-Employed Q&A
Why do lenders average 2 years of income?+
Fannie/Freddie guidelines require a 2-year self-employment history and average net income after write-offs. Bank-statement and P&L programs work around this by using deposits or a CPA-prepared statement instead.
Do write-offs hurt me?+
For traditional loans, yes — every dollar written off reduces qualifying income. Bank-statement (12 or 24 months) and 1099-only programs let you qualify on gross deposits or 1099 totals with a fixed expense factor.
Investor Q&A
Do I need to show tax returns for a rental?+
Often no. DSCR loans qualify on the property's rent-to-payment ratio, not personal income. Great for self-employed investors who write everything off.
Can I close in an LLC?+
Yes — most DSCR, portfolio, bridge, and fix-and-flip products allow LLC vesting. Standard Fannie/Freddie loans generally do not.
How is DSCR calculated?+
Monthly market rent ÷ full PITIA (principal + interest + taxes + insurance + HOA). 1.0 = break-even. Many programs go down to 0.75 with pricing adjustments.
Tools
Mortgage Key Terms
Plain-English definitions of the words you'll see on your Loan Estimate, disclosures, and closing paperwork. Search, jump by letter, or tap a term to expand its explanation.
AAbility-to-repay rule+
The ability-to-repay rule is the reasonable and good faith determination most mortgage lenders are required to make that you are able to pay back the loan.
AAdjustable Rate Mortgage (ARM)+
An adjustable rate mortgage (ARM) is a type of loan for which the interest rate can change, usually in relation to an index interest rate. Your monthly payment will go up or down depending on the loan’s introductory period, rate caps, and the index interest rate. With an ARM, the interest rate and monthly payment may start out lower than for a fixed-rate mortgage, but both the interest rate and monthly payment can increase substantially. Learn more about how ARMs work and what to consider.
AAmortization+
Amortization means paying off a loan with regular payments over time, so that the amount you owe decreases with each payment. Most home loans amortize, but some mortgage loans do not fully amortize, meaning that you would still owe money after making all of your payments. Some home loans allow payments that cover only the amount of interest due, or an amount less than the interest due. If payments are less than the amount of interest due each month, the mortgage balance will grow rather than decrease. This is called negative amortization. Other loan programs that do not amortize fully during the loan may require a large, lump sum “balloon” payment at the end of the loan term. Be sure you know what type of loan you are getting.
AAmount financed+
It means the amount of money you are borrowing from the lender, minus most of the upfront fees the lender is charging you.
AAnnual income+
Annual income is a factor in a mortgage loan application and generally refers to your total earned, pre-tax income over a year. Annual income may include income from full-time or part-time work, self-employment, tips, commissions, overtime, bonuses, or other sources. A lender will use information about your annual income and your existing monthly debts to determine if you have the ability to repay the loan. Whether a lender will rely upon a specific income source or amount when considering you for a loan will often depend upon whether you can reasonably expect the income to continue.
AAnnual Percentage Rate (APR)+
An annual percentage rate (APR) is a broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate, any points, mortgage broker fees, and other charges that you pay to get the loan. For that reason, your APR is usually higher than your interest rate.
AAppraisal fee+
An appraisal fee is the cost of a home appraisal of a house you plan to buy or already own. Home appraisals provide an independent assessment of the value of the property. In most cases, the selection of the appraiser and any associated costs is up to your lender.
AAutomatic payment+
Automatic payments allow you to set up recurring mortgage payments through your bank. Automatic payments can be a convenient way to make sure that you make your payments on time.
Definitions courtesy of the Consumer Financial Protection Bureau, a U.S. government agency. Reproduced for educational purposes.
State Disclosures
Everald L. Johnson is licensed in Colorado as a Mortgage Loan Originator (NMLS #2443040). Regulatory oversight is provided by the Colorado Division of Real Estate, and consumers may verify licensing or file a complaint through the Colorado Division of Real Estate or NMLS Consumer Access. Colorado borrowers are entitled to a written lock-in agreement and a Loan Estimate within three business days of a completed application.
Everald L. Johnson is licensed in Florida as a Mortgage Loan Originator (NMLS #2443040), regulated by the Florida Office of Financial Regulation. Florida borrowers may verify licensing or file a complaint at the Florida Office of Financial Regulation or NMLS Consumer Access. Florida law requires timely delivery of a Loan Estimate and Closing Disclosure, and prohibits certain fees prior to issuance of a written commitment.
This site is for informational purposes and does not constitute an offer to lend or a commitment to make a loan. All loans are subject to underwriting approval, program guidelines, and appraisal. Rates, terms, and program availability are subject to change without notice. Equal Housing Opportunity.
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