Mortgage questions, answered straight

Yes. FHA loans are about half of John Stafford's business. An FHA loan is a home loan insured by the Federal Housing Administration for a home you'll live in. It's often a good fit for first-time buyers, people who are still building their credit, and buyers who haven't saved a big down payment. John will tell you plainly whether FHA or another loan fits you better. More on the FHA loans page.

DM it to @GoRascalJohn on TikTok or Instagram, or call or text (713) 728-6662. John looks it over himself and tells you plainly what looks off and what looks fine. It's free, it doesn't matter which lender it came from, and you don't have to sign anything. Cover your Social Security number and loan number before you send it. As John puts it: “Send me your Loan Estimate and I'll look it over myself.”

John is personally licensed in Texas and Tennessee. He also does DSCR investor loans in states where that business-purpose loan doesn't require a personal license. If you're elsewhere, reach out anyway, because through GoRascal there may still be a way to help. You can verify John's license on NMLS Consumer Access, #2470539.

A Loan Estimate is a standard three-page form that lenders must give you within three business days of receiving your mortgage application. It shows your estimated rate, payment, and closing costs in the same layout every lender uses, so you can compare offers side by side.

No. A Loan Estimate isn't a contract or an approval, and receiving one doesn't lock you in. Before you receive it and say you want to proceed, the only fee a lender can charge is for your credit report.

The closing cost estimates are generally good for at least 10 business days; the expiration date is on page 1. If your rate isn't locked, the rate and points can change any day.

Section A, Origination Charges, is the lender's own fees and points, and it's the cleanest comparison between lenders. Then compare page 3's In 5 Years line, which totals what you'd pay over five years.

The lender's own fees and services you can't shop for generally can't go up. Recording fees plus shoppable services from the lender's list can't rise more than 10% in total. Prepaids, escrow, and services you shop for yourself can change.

Often, but not always. A lot of first-time buyers use FHA because the guidelines are more forgiving. FHA does carry mortgage insurance (MIP), though, and depending on your credit and savings a conventional loan can work out cheaper over time. I'll lay both options side by side so you can pick the one that makes sense for you.

Usually not much. Credit scoring models generally treat several mortgage inquiries within a short shopping window as a single inquiry, so comparing Loan Estimates from a few lenders is normal and smart.

No. A lower rate can come with discount points or higher fees. Compare offers at the same points, look at Section A, and check the In 5 Years total on page 3 to see the real cost.

APR folds in certain costs like points, some lender fees, and mortgage insurance, and expresses them as a yearly rate. Use APR to compare loans of the same type and term.

A discount point is an upfront fee equal to 1% of your loan amount, paid at closing to lower your interest rate. Points appear in Section A of the Loan Estimate.

Divide the cost of the points by the monthly payment savings to get your break-even in months. If you'll keep the loan longer than that without selling or refinancing, points can save money.

A lender credit reduces your closing costs in exchange for a higher interest rate. It appears in Section J. It can help with cash to close, but the higher rate costs more each month.

Closing costs are fees and prepaid items paid to get your mortgage and transfer the home, separate from your down payment. On the Loan Estimate they're Loan Costs (Sections A–C) and Other Costs (Sections E–H).

Often yes, up to limits that depend on the loan program. Seller credits are negotiated in your purchase contract and should appear in Calculating Cash to Close on page 2.

No. The Texas Constitution prohibits a real estate transfer tax, so Section E on a Texas Loan Estimate is usually just recording fees.

Under Texas Constitution Article XVI, Section 50(a)(6), all loans on your homestead combined must stay within a set share of its fair market value. Your cash out is what's left under that limit after paying existing liens and closing costs.

It can't close before the 12th day after the later of your application or receiving the Notice Concerning Extensions of Credit. Appraisal and underwriting usually make it longer.

Yes. Most fees to originate, evaluate, record, and insure a Texas 50(a)(6) loan are capped at a small share of the original loan amount. Interest, bona fide discount points, and certain third-party items like the appraisal and survey are excluded.

Tennessee charges a realty transfer tax on the purchase and a mortgage tax on the loan amount. Both usually appear in Section E. If a Tennessee Loan Estimate shows only recording fees, ask.

County trustee taxes are generally payable starting the first Monday in October and become delinquent March 1. Some cities bill separately, so ask who pays the current year's bill if you close in fall or winter.

A bank statement loan figures income from your bank deposits instead of tax returns. It's a non-QM program, so it may cost more than conventional financing, but it lets you qualify on what you actually bring in.

A DSCR loan is a business-purpose investor loan that qualifies mainly on the property's rent divided by its monthly payment (PITIA), rather than your personal income. It's for investment properties only. John does DSCR loans in Texas and Tennessee and in states where this business-purpose loan doesn't require a personal license.

John Stafford is a mortgage loan officer based in Odessa, Texas, NMLS #2470539, with GoRascal Inc. (NMLS #2072896). Lending since late 2022 with 100+ loans closed, he's licensed in Texas and Tennessee and offers free Loan Estimate reviews. Call or text (713) 728-6662.