Buying a home with a mortgage
What lenders look for, which loan fits you, what it all costs, and what happens between pre-approval and getting your keys.
Get pre-approvedThe short answer
To buy a home with a mortgage, most people need a credit score of at least 580 to 620, a down payment of 0% to 20% depending on the loan type, steady income, and total monthly debts (including the new payment) of roughly 43% to 50% of gross income or less. After pre-approval, the process from signed contract to closing usually takes 30 to 45 days.
How a purchase mortgage works
A mortgage is a loan secured by the home you buy. You pay part of the price upfront (the down payment), and the lender pays the rest. You repay the loan in monthly installments, usually over 30 years, though 15- and 20-year terms are common. If you stop paying, the lender can take the home through foreclosure, which is why lenders check your income, credit, and savings so carefully.
Your monthly payment usually has four parts, often called PITI: principal (paying down the loan), interest (the cost of borrowing), taxes (property tax), and insurance (homeowners insurance, plus mortgage insurance if you put less than 20% down).
How much you can afford
Lenders mainly look at your debt-to-income ratio (DTI): your total monthly debt payments divided by your gross monthly income. A classic guideline is the 28/36 rule: housing costs at or under 28% of gross income and all debts at or under 36%. Many loan programs approve higher DTIs, often up to 43% to 50% with strong credit or savings, but approval is not the same as comfort.
Example: with $9,000 a month in gross income, 28% is $2,520 for housing. At a 7% rate that supports roughly a $300,000 to $320,000 loan once taxes and insurance are included. Walk through the full affordability math.
Loan types compared
| Loan | Minimum down | Typical minimum credit | Mortgage insurance | Best for |
|---|---|---|---|---|
| Conventional | 3% (some first-time buyer programs); 5% otherwise | 620 | PMI if under 20% down; can be removed later | Good credit, want flexibility |
| FHA | 3.5% (580+ score); 10% (500 to 579) | 580 (500 with 10% down) | Upfront 1.75% plus annual premium; often for the life of the loan | Lower scores or smaller savings |
| VA | 0% | No VA minimum; lenders often want about 620 | None monthly; one-time funding fee unless exempt | Eligible service members, veterans, some spouses |
| USDA | 0% | Lenders often want about 640 | Upfront 1% plus 0.35% annual fee | Eligible rural and suburban areas, income limits |
| Jumbo | Often 10% to 20% | Often 700+ | Varies by lender | Loans above $832,750 (most areas) in 2026 |
The 2026 conforming loan limit is $832,750 for a one-unit home in most of the U.S., and up to $1,249,125 in high-cost areas. Loans above your county's limit are jumbo loans. See how loan limits affect you.
Down payment
Twenty percent down is not required. It does avoid mortgage insurance on conventional loans and lowers your payment, but many buyers put down 3% to 10%. Down payment money can come from savings, a gift from family (with a signed gift letter), retirement account withdrawals or loans, and state or local down payment assistance programs. Compare down payment options.
Credit scores
Your score affects both whether you qualify and what you pay. On conventional loans, moving from the mid-600s to 740 or higher can noticeably lower both your rate and your PMI cost. Before you apply, check your reports for free at AnnualCreditReport.com, pay down credit card balances, and avoid opening new accounts. Credit score requirements by loan type.
Costs beyond the down payment
- Closing costs: typically 2% to 5% of the loan amount for lender fees, appraisal, title insurance, recording, and prepaid taxes and insurance. What is in closing costs.
- Earnest money: a good-faith deposit, often 1% to 3% of the price, credited toward your costs at closing.
- Inspection: usually a few hundred dollars, paid before closing. Do not skip it.
- Reserves: some loans require savings left over after closing, often two months of payments or more.
Step by step to closing
- Get pre-approved so you know your budget and sellers take your offer seriously. Pre-qualification vs. pre-approval.
- Shop lenders. Request Loan Estimates from two or three lenders on the same day and compare rate, points, and fees.
- Make an offer with inspection, appraisal, and financing contingencies.
- Lock your rate once you are under contract. How rate locks work.
- Underwriting and appraisal. Answer document requests quickly and do not change jobs or take on new debt.
- Review your Closing Disclosure, which you must receive at least three business days before closing.
- Close, sign, and get your keys. The full process in detail.
Mistakes to avoid
- Shopping only one lender. Rates and fees for the same borrower can differ meaningfully.
- Stretching to the maximum approval instead of a payment you are comfortable with.
- Financing a car or furniture before closing. New debt can derail approval.
- Wiring money based on an email without calling your title company at a verified number. How to avoid wire fraud.
Common questions
What is the minimum down payment to buy a house?
It can be 0% with a VA loan (for eligible service members and veterans) or a USDA loan (for eligible rural areas and incomes). Conventional loans allow as little as 3% for many first-time buyers, and FHA loans require 3.5% with a credit score of 580 or higher.
Can I buy a house with a 600 credit score?
Often yes, with an FHA loan, which allows 3.5% down at 580 and above. Many conventional lenders want 620 or higher. A higher score usually earns a lower rate and cheaper mortgage insurance.
How long does it take to get a mortgage?
Pre-approval can take a day or two once you send documents. After you sign a purchase contract, closing typically takes 30 to 45 days.
Is it better to rent or buy right now?
It depends on how long you plan to stay, your local prices and rents, and your savings. Buying tends to make more sense the longer you stay, because closing costs get spread over more years. A common rule of thumb is to plan on staying at least five years.
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