Mortgage Guide

A Homebuyer’s Primer

To anyone buying their first home, the mortgage landscape can feel like a labyrinth of acronyms, rate tables, and banking terms. We get it—it’s overwhelming. Not to worry. You’re in the right place.

Dream Home Checklist

Ready to put it all into practice? A home dream checklist keeps your search focused. List everything you want in a home, then split it into must-haves and nice-to-haves. A must-have is something you can't live without, like a home office or a fenced yard. A nice-to-have is something you could add later, like updated countertops. Bring it to every showing, share it with your agent, and you'll zero in on homes that actually fit your life.

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Guide

Mortgage

Buying a home? It’s a big deal. The kind of big that might make your heart race. But here’s the thing—it could also be one of the smartest investments you’ll ever make. From the thrill of calling a place your own to those sweet potential tax deductions, homeownership is packed with perks. Ready to start your journey? Grab this guide, and let’s hit the road... all the way to your new front door.

Amortization

The slow-motion math behind your loan. Amortization is how your balance gets paid down through regular payments over the life of the loan. Early on, most of each payment goes toward interest. As the years pass, more of it chips away at the principal. It's why two identical monthly payments can do very different work depending on where you are in the loan.

Mortgage Jargon, Demystified

Hover over each tile to reveal what the terms mean.

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Homeownership

Pros:

Build potential equity Potential tax benefits Stable payments (with a fixed-rate mortgage) The freedom to personalize your space

Renting

To Own or Not to Own?

Weigh the tradeoffs before you decide. Tap each title to compare homeownership and renting.

APR (Annual Percentage Rate)

Think of it as your loan’s all-in number. The APR tells you what the whole thing costs – interest, fees, and all – wrapped up in one tidy percentage. Perfect for getting the big picture of what you’ll really pay over the year.

ARM (Adjustable-Rate Mortgage)

This mortgage loan starts with a consistent interest rate, but after a few years, fluctuates with market conditions. ARMs usually include a bottom rate (the rate will not go below this) and a top rate (the rate will not go above this), despite any large swings. ARM loans might be great when rates are low, but be ready to adapt when they rise!

DTI (Debt-to-Income Ratio)

How much of your paycheck is already spoken for? DTI tells lenders what percentage of your income goes toward paying recurring debt each month. The lower it is, the more breathing room a lender will perceive you’ll have for that new mortgage loan.

Earnest Money

Think of it as a deposit that shows you’re serious about buying a home. This “good faith” money is usually 1-2% of the purchase price and held in escrow. If you follow through with the purchase, it gets applied to your down payment or closing costs. If you back out without a good reason, it may be forfeited.

Escrow

Part of your mortgage may go into an escrow account to cover property taxes and insurance. It’s a way to spread the bills so you’re not hit with them all at once. Sometimes, it can seem like your monthly mortgage payment is changing, but (assuming you have a fixed-rate loan) it’s likely adjusting to changes to your property taxes and insurance bill.

Fixed-Rate Mortgage

Set it and forget it. With a fixed-rate mortgage loan, your interest rate stays the same for the life of the loan – 15, 20, or 30 years – so your monthly principal and interest payment is nearly as predictable as clockwork

Interest

The price of borrowing money. It's the percentage of your loan balance you pay each year on top of what you borrowed. The lower the interest rate, the lower your borrowing cost.

LTV (Loan-to-Value Ratio)

LTV is the comparison game mortgage professionals play. It’s how much you’re borrowing vs. how much your home is worth. A lower LTV could land you better loan terms and save you some cash in the long run – since the risk of loss if you default is perceived to be lower by the lender.

PMI (Private Mortgage Insurance)

If your down payment is less than 20%, a PMI payment is like a safety net – but for your lender, not you. It protects them if you if you stop making your mortgage loan payments. The good news? You might be able to kick it to the curb once you hit 20% equity.

Principal

This is the main event – the actual amount you’re borrowing to buy your home. Everything else, like interest, just tags along for the ride.

Rate Tables

These handy charts give you the lowdown on mortgage rates across the board, showing what you might pay at different interest rates and loan terms. Think of it as your guide to finding the sweet spot between what you want and what you can afford.

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Cons:

Upfront costs Maintenance responsibilities Potential market fluctuations

Pros:

Cons:

Flexibility to move Fewer maintenance responsibilities Lower upfront costs

No equity build-up Rent can increase Fewer options to personalize your space

What to Expect When You’re Inspecting (and the Rest of the Timeline)

And Again... But With the Juicy Details

Get Pre-Approved

Before you start dreaming about hardwood floors and open kitchens, you’ll want to get pre-qualified or pre-approved for a mortgage loan. It’s like getting a VIP pass before the concert—when you find the house, you’ll be ready to make your offer.

Step 1 of 5

Credit Check

Employment

Assets & Debts

Be sure to list your assets and debts. Your mortgage pro will peek at your credit score, which is like your financial report card. The higher, the better—scores range from 300 to 850.

When it comes to employment, your job history and salary matter. Lenders want to see that you’ve got a steady income to cover those mortgage payments.

For a credit check, you'll need your bank statements, tax returns, and debts (think student loans, credit cards, and car payments). Your loan team wants your debt-to-income ratio, how much you owe versus how much you make.

No one-size-fits-all here. There are different loan options, and your Motto Mortgage loan originator can help you pick the one that fits your financial situation like a glove.

Choosing Your Loan

Step 2 of 5

Start the Home Search

Now that you’re pre-qualified or pre-approved, it’s time to start the hunt. Homes come in all shapes and sizes—condos, townhomes, single-family houses, you name it. The trick is to find one that fits both your lifestyle and your budget.

Outdoor space is important, don't forget about the yard, balcony, or patio. Even a small patch of green or a balcony for morning coffee can matter, especially if you've got kids, pets, or just like being outside.

For location, pick an area that suits your needs, whether it’s close to work, schools, or that favorite coffee shop. Must-Haves vs. Nice-to-Haves: What’s non-negotiable? A big backyard? A home office? Jot it down.

Stick to your budget like glue. It's easy to fall for a home that stretches past what you can afford once taxes and insurance are added in. Set your number before you start touring.

Budget

Location

Outdoor Space

Step 3 of 5

The Offer – The Contingency Countdown

You’ve found “the one,” and the offer is accepted—congrats! But now comes the contingency period, your window to do some serious due diligence before locking in the deal. Think of this as your “check under the hood” moment. You’ve got a deadline to finalize things or back out without losing your deposit.

When it come to utilities, ensure water, electricity, and gas are squared away. Arrange for utility transfers to your name, so they’re ready to go on closing day.

For financing, your mortgage professional will work with the lender to confirm your loan. Be ready to supply any additional documents and avoid major purchases that might affect your credit.

Lenders also require homeowners’ insurance. It’s protection for both you and them. Make sure your policy covers the home’s value, plus belongings inside.

Earnest Money

Inspection

Appraisal

Insurance

Financing

Utilities

Lenders want to know that the home is worth what you’re paying. An appraisal ensures the property’s value stacks up with the loan amount. If it doesn’t, you might need to adjust your offer or explore different loan options.

A home inspection gives you the lowdown on the property’s condition. If major issues pop up in the inspection (roof leaks, foundation cracks), you’ve got options: renegotiate, request repairs, or walk away.

Earnest money is a good-faith deposit you put down to show you’re serious. It’s held in escrow and applied to your purchase later. But if you decide to back out for reasons not covered by contingencies, you could lose it.

Once the contingencies are cleared, you’re in the final stretch. But if something doesn’t sit right during the contingency period, you can walk away—no harm, no foul.

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Step 4 of 5

With the appraisal and inspection complete, the mortgage pros will finalize everything. This is where all that pre-approval information becomes official. Your mortgage team will take a close look at your full financial picture to get the loan moving toward the finish line.

Sometimes there are a few final conditions. This cna include additional documents or clarifications. Once that’s squared away, you’ll get the final approval.

The underwriting process is when the lender will verify all the information you’ve provided and make sure everything checks out.

After you apply, the mortgage team will review your application. You may need to provide more financial documents and re-verification of your employment and debts (no big purchases or opening credit accounts).

Apply for Loan

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Underwriting

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Conditions

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Step 5 of 5

Closing

You made it to closing day, the moment every step so far has been building toward. This is where the paperwork gets signed, the funds change hands, and the house officially becomes yours.

Once everything's signed, the transfer of ownership is complete and the home is officially yours. All that's left is to pick up the keys and start moving in!

Get ready for a lot of signatures when you sign the paperwork. You'll sign the mortgage, the note, and a bunch of other important docs.

Review the Closing Disclosure, which outlines your loan terms, monthly payments, and closing costs. You'll get it at least three days before closing.

Disclosure

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Paperwork

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Transfer

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Your Home Office Files

Getting Your Docs in a Row – Your Application Checklist

Here’s what you’ll need to apply for your mortgage loan:

Personal Identification: Government-issued ID (like a driver’s license or passport).

Social Security Number: For you and any co-borrowers.

Proof of Income: Pay stubs, W-2s, tax returns (last two years).

Employment Verification: Your employer’s contact info and your work history.

Bank Statements: Last two to three months for all accounts.

Asset Documentation: Details on any savings, investments, or other assets.

Debt Information: Statements for any outstanding loans or credit card balances.

Purchase Agreement: This signed contract sets the purchase price, contingencies, and closing date. It's your official agreement with the seller.

Lock in Your Rate: Once you're happy with your rate, lock it in. Locks only last a set period, so make sure yours covers your closing date.

From navigating rates to handling the paperwork, your local Motto Mortgage office has a home loan personal shopper ready to guide you through every step. They’ll compare countless mortgage loan options from across the country and help you find the one that fits you best. So, what do you say? Let’s get you one step closer to that front door.

(tap the circle on the left for the next step)

Hover over each step to learn more

Final Loan Approval (1-2 Weeks)

Appraisal and Inspection (1-2 Weeks)

Closing (1-3 Days)

Loan Application (1-2 Weeks)

Offer Accepted (1-2 Days)

Home Search (1-3 Months)

Pre-Approval (1-3 Days)

Submit your full application and provide financial documents.

Negotiate terms and sign the purchase agreement.

Ensure the home’s value and condition.

Find the right home and make an offer.

Get pre-qualified or pre-approved for a mortgage loan to know your budget.

Lender reviews everything then issues the final approval and Clear to Close.

Sign the paperwork, pay closing costs, and get the keys.

Explore the REMAX Home Seller's Guide

REMAX®

Each REMAX Office Independently Owned and Operated. *RE/MAX, LLC or its affiliates do not provide mortgage origination or pre-qualification services.

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Mortgage Myth Busting