Start with a clear answer, then explore the details that matter for your home, income and budget.
Mike Alkema · NMLS #642953 · Leeward Point Mortgage LLC
Original 25 answers checked September 12, 2026; five income and debt answers added and checked September 21, 2026. Program requirements can change; the linked agency guidance and your lender’s current requirements control.
Compare licensing, available loan programs, communication and written loan costs. A broker can compare participating wholesale lenders, but that does not make every broker offer cheaper than every bank offer.
Practical comparison: ask each provider to quote the same loan amount, term, lock period and points. A lower payment can hide a larger upfront cost.
Source: CFPB: compare Loan Estimates
Expect requests for identification, income records, asset statements and information about debts. The exact checklist depends on your income, loan program and lender; self-employed applicants may need business records as well.
Process distinction: preapproval documentation is different from the information needed to request a Loan Estimate. Ask for a secure upload method before sending financial documents.
Source: CFPB: applying for a mortgage
Plan for more than the down payment. Closing charges, prepaid insurance and taxes, initial escrow deposits and any required reserves also affect the amount you need. Credits and earnest money already paid can change the final cash to close.
Practical example: a buyer can afford the down payment but still need funds for settlement charges. Compare the Loan Estimate’s cash-to-close figure with a separate emergency-fund budget.
Source: CFPB: Loan Estimate explainer
Neither is always better. Compare eligibility, total payment, upfront charges and mortgage insurance using your credit profile and down payment. FHA and conventional loans have different insurance structures, so the interest rate alone is not enough.
Program distinction: FHA insurance is part of FHA financing; conventional mortgage insurance depends on the loan structure. A lender’s additional approval requirements may also differ from the agency minimum.
Source: CFPB: compare loan types
Yes, a seller can agree to pay allowable buyer closing costs. VA treats ordinary closing-cost credits differently from seller concessions, which have a separate limit. The purchase contract, eligible charges and lender review determine how a negotiated credit can be used.
VA guideline: do not assume the four-percent concession limit caps every seller-paid closing cost. Have the lender classify the proposed items before relying on the credit in an offer.
Yes, self-employment does not by itself prevent approval. The lender must establish qualifying income under the selected program. Business revenue, taxable income and income available for a mortgage are different figures.
Agency guideline: Fannie Mae evaluates income stability and the business’s ability to keep producing income. Other programs and lender overlays may require different documentation. Discuss the income calculation before setting a purchase budget.
A transfer of ownership can cause taxable value to uncap in the following calendar year, unless an exception applies. The seller’s current tax bill may therefore understate your future cost.
Michigan tax rule: ask the local assessor about the property’s expected taxable value and applicable exemptions. Budget using a forward-looking estimate rather than simply copying the listing’s tax amount.
A low appraisal can change the financing available for the agreed price. Possible next steps include negotiating the price, reviewing factual errors through the lender’s process, or considering additional cash if the program and your budget allow. Before an FHA or VA offer, use the Michigan FHA and VA appraisal checklist to prepare property-condition questions.
Practical distinction: a valuation review is not a promise of a higher appraisal. Contract deadlines and protections matter; discuss those with your real estate professional before deciding whether to proceed.
Yes, eligible borrowers can use the benefit again with restored or remaining entitlement. Whether a down payment is needed depends on the entitlement available, the new loan and the lender’s review; prior use is not an automatic disqualification.
VA guideline: start with a current Certificate of Eligibility and details of any prior VA loan. Reusing the benefit still requires the new transaction to meet applicable occupancy and underwriting rules.
First obtain the reason for the decision. The next step depends on whether the issue involves credit, income documentation, the property or a lender-specific requirement. Another lender may have different options, but a second opinion is not a guarantee of approval.
Practical next step: bring the denial explanation and a general description of your goal. Identifying the actual obstacle is more useful than repeating applications without changing the underlying issue.
Source: CFPB: after a mortgage denial
Some conventional programs allow a 3% down payment for eligible borrowers and properties. HomeReady is one example with income and other requirements. A low down payment does not remove closing costs or automatically produce the lowest total borrowing cost.
Comparison tip: ask for the payment, mortgage insurance and cash-to-close at more than one down-payment level before choosing.
Source: Fannie Mae: HomeReady
Many programs permit gifts from eligible donors, but the donor rules, required borrower contribution and documentation vary. A true gift has no repayment obligation; a loan from a family member should not be described as a gift.
Fannie Mae guideline: document the gift and transfer under the applicable program. Ask your lender how to handle the funds before moving money between accounts.
Source: Fannie Mae: personal gifts
FHA financing can allow a down payment as low as 3.5% for qualified borrowers. The applicable credit requirements and the lender’s review still matter; not every applicant qualifies for the minimum. Closing costs are separate from the down payment.
Budget tip: compare the FHA total payment and mortgage insurance with any conventional option you qualify for. The smaller down payment is only one part of the decision.
Source: CFPB: FHA loans
The answer depends on the FHA case date and original loan-to-value ratio. For case numbers assigned on or after June 3, 2013, annual mortgage insurance generally lasts 11 years at an original LTV of 90% or less, or the loan term above 90%.
HUD guideline: reaching 20% equity does not by itself cancel insurance on those FHA loans. Ask the servicer to confirm your loan’s schedule before comparing a refinance and its costs.
Source: HUD: final monthly MIP date
For many covered borrower-paid PMI loans, you can request cancellation when the balance reaches 80% of the home’s original value, subject to conditions. Automatic termination generally occurs at the scheduled 78% point if payments are current.
Consumer protection distinction: payment history, liens and property value can affect a cancellation request. Appreciation-based cancellation may follow different investor rules. Ask the servicer which route applies to your loan.
Source: CFPB: PMI cancellation
Eligible VA borrowers can often buy without a down payment. Available entitlement, the purchase price, appraised value and lender requirements still matter. Zero down does not mean there are no closing costs.
Planning tip: have the lender check entitlement and estimate the full cash-to-close before writing an offer. A price above the appraised value can create a cash gap.
Source: VA: purchase loans
VA-backed home loans do not require monthly mortgage insurance. A VA funding fee may apply unless the borrower qualifies for an exemption. That fee is different from monthly insurance.
Comparison tip: compare the full payment and closing costs, including any financed funding fee, rather than assuming that no monthly insurance means no loan costs.
Source: VA: purchase loan benefits
Receiving VA compensation for a service-connected disability is one qualifying basis for an exemption. VA also lists other qualifying circumstances. The lender should verify the exemption rather than assume it from a general description of disability status.
VA guideline: check the Certificate of Eligibility and supporting records before closing. Certain later compensation awards may support a refund, depending on their effective date and VA’s rules.
Source: VA: funding-fee exemptions
You can request a COE through VA online, through a lender able to obtain it, or by mail. The service records needed depend on your military or surviving-spouse status.
Process distinction: a COE establishes benefit eligibility; it is not a final mortgage approval. Income, credit, entitlement and the property still need review.
Source: VA: request a COE
USDA property eligibility is determined by location, not by a city’s name alone. Check the specific address using USDA’s eligibility resources. Household income and other borrower requirements must also be met.
Michigan planning tip: two homes in the same general search area can have different eligibility. Check the address before treating USDA as the financing plan for an offer.
Source: USDA: Guaranteed Loan Program and eligibility resources
The USDA Single Family Housing Guaranteed Loan Program can provide 100% financing for eligible borrowers and homes. Closing costs and program fees still need to be addressed; zero down is not the same as zero cash needed.
Program distinction: the Guaranteed program uses approved lenders. USDA also has a separate Direct program with different eligibility and administration. Confirm which program is being discussed.
Source: USDA: Guaranteed Loan Program
Check the expiration date and conditions on your lender’s letter. The CFPB describes 30 to 60 days as typical, but lender policies vary. Updated income, asset or credit information may be needed to extend it.
Planning tip: tell the lender about employment, debt or down-payment changes while you shop. A letter’s printed expiration date does not guarantee approval if the underlying facts change.
Source: CFPB: preapproval letters
A hard credit inquiry can affect your score; a soft inquiry does not. Ask which type the lender will use. Credit-scoring models generally group same-type loan-shopping inquiries within a limited window, which can vary by model.
Shopping tip: compare lenders within a focused period and confirm their process. Do not assume that a prequalification based on a soft inquiry is the same review as a documented preapproval.
Do not assume closing a card will improve your mortgage credit profile. Removing available credit can raise utilization and lower a score, even if the remaining balances stay the same.
Practical step: discuss planned account changes with the lender before making them. The right choice depends on balances, fees and your wider financial situation; no single action guarantees a score increase.
Source: CFPB: closing a credit card
Some renovation mortgages combine eligible repair costs with a purchase or refinance. FHA’s 203(k) program is one option. The property, planned work, contractor arrangements and lender’s program availability must fit the requirements.
Planning tip: discuss the scope before committing to the house. A repair budget alone does not establish eligibility; timing, inspections and how funds are released also need a workable plan.
Fannie Mae evaluates overtime history and trends. Two years is recommended; at least 12 months may be acceptable with positive factors. Stable or increasing earnings are averaged. A decline must have stabilized before the income can qualify.
I would compare your regular pay with your overtime separately. Bring recent paystubs and prior earnings records, especially if your hours changed. Your household budget should also work during an ordinary workweek.
Source: Fannie Mae: variable income
Added September 21, 2026 · General Fannie Mae guidance; lender requirements and other programs may differ.
An annual bonus is divided by 12 for Fannie Mae’s monthly trend analysis, even if paid early in the year. History and eligibility still need review.
Illustration: a $12,000 annual bonus equals $1,000 a month before eligibility review—not $4,000 because it arrived in March. I would ask what period the bonus covers before using it in your buying plan.
Source: Fannie Mae: variable income
Added September 21, 2026 · General Fannie Mae guidance; lender requirements and other programs may differ.
Yes. Fannie Mae evaluates employee commission history, documentation and earnings trends. A strong recent month alone does not establish stable qualifying income.
Tell me whether you receive a W-2 or work as an independent contractor, and whether your compensation plan changed. I would review those facts before estimating a purchase range. Different loan programs and lenders may apply different requirements.
Source: Fannie Mae: variable income
Added September 21, 2026 · General Fannie Mae guidance; lender requirements and other programs may differ.
Fannie Mae allows a documented actual student-loan payment, including a verified $0 income-driven payment. A credit report showing $0 alone is insufficient. For deferment or forbearance, its options include 1% of the balance or a documented fully amortizing payment. Other programs differ.
I would first distinguish an income-driven payment from a temporary payment pause. Have your current servicer statement ready for the secure document review. For illustration, 1% of a $40,000 balance is $400; that does not establish which method applies to you.
Source: Fannie Mae: monthly debt obligations
Added September 21, 2026 · General Fannie Mae guidance; lender requirements and other programs may differ.
Fannie Mae counts lease payments as recurring debt even when only a few payments remain. An auto lease is treated differently from an installment loan nearing payoff.
Before signing a new lease or buying out your current one, I would compare the monthly payment and cash required with your homebuying plan. For illustration, a $450 lease uses 7.5% of $6,000 monthly qualifying income before housing and other debts.
Source: Fannie Mae: monthly debt obligations
Added September 21, 2026 · General Fannie Mae guidance; lender requirements and other programs may differ.
Explore Michigan mortgage case studies, including an VA case: seven elapsed days to clear-to-close. A past outcome is not a promised timeline for another borrower.
Government and agency sources explain their own rules. A lender may add requirements, often called overlays. Practical examples and comparison suggestions help frame a decision; they are not approval commitments or substitutes for a review of your documents.
Found an unclear answer or a changed rule? Send Mike a correction. Keep personal financial documents out of ordinary email.
Bring the property, timeline and unresolved financing question to your Lansing mortgage partner for Realtors. Use the agent mortgage guide, condo questions and Lansing VA and FHA appraisal guidance to prepare before an offer.
Review the 2026–2027 agency changes and a practical checklist covering reserves, repairs, assessments and insurance before an offer. Michigan condo financing changes and buyer checklist.
Compare ten Birmingham-area luxury mortgage guides, including the Bloomfields, Franklin, Bingham Farms, Orchard Lake Village, West Bloomfield Township, Northville, Oakland Township and Rochester. Review larger-loan questions, property considerations and purchase timing with Mike.
Start with a useful guide to payment, first-time buying or VA financing. When a question comes up, bring it to me.
Compare the property’s taxes, condo costs, loan options and the cash you want to keep after closing. Explore Mike’s Troy mortgage guide.
In this 2025 example, Mike restructured the buyers’ debt and reports savings and lower payments. Read the anonymized FHA case and its documented milestones.
Start with the address and the questions that affect your payment, cash and property review.
Use the Grand Ledge mortgage guide to organize property records, future tax estimates and improvement questions. Compare nearby communities through the Greater Lansing mortgage hub.
Browse 28 real borrower questions or start with what you can afford, cash for a $300,000 home, buying with $5,000 down, credit-score requirements and self-employed qualification.
If you’re wondering how this applies to your plans, send me the question you’re trying to answer. You don’t need to have everything figured out before we talk.
Prefer to start with the numbers? Use the Michigan Home Affordability Calculator or take the 2-Minute Home Buyer Readiness Assessment. Neither is a loan approval.
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By Mike Alkema, Michigan Mortgage Broker · NMLS 642953 · 30+ years of mortgage and real-estate lending experience. Content updated September 27, 2026.
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Figures are hypothetical. Before-and-after images are AI-generated illustrations. Financing is subject to lender approval.
