Mortgage Loan Process

Getting mortgage ready includes a good credit score,
a knowledgeable lender and a strong real estate advisor,

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Some Things to Consider Before You Decide to Buy a House:

The Down Payment

You’ll need money for your down payment—typically 10-20% of the purchase price (Example $10,000 to $20,000 for a house that appraises for $100,000) depending on the type of mortgage, and you may be responsible for closing costs, as well. Consider using some savings, a financial gift, or proceeds from a previous home sale for the down payment and closing costs. If your down payment on a conventional loan is less than 20%, you must pay private mortgage insurance (PMI), which covers the lender if you stop paying your mortgage and default on your loan. PMI usually costs less than 1% of the outstanding loan balance, so putting 20% down can save you thousands of dollars over the life of the loan. Learn more about down payment requirements.

Your Credit Score

Banks look at your credit score, your income, and the value of the home you’re buying to determine how much they’ll lend you. Credit scores range from 300 to 850. A higher credit score may lower your interest rate—and lower your monthly payment. If you’ve recently missed payments or maxed out your credit cards, you may consider waiting to purchase a home until your credit improves so you can qualify for a lower interest rate. Learn more about credit scores and how you can improve yours.

Is My Debt-to-Income Ratio Less Than 43%?

All of your monthly payments toward your existing and future debts should usually be less than 43% of your monthly income. However, the amount you qualify for based on this calculation may not be suitable for you. You should review your personal situation and work with a financial advisor to decide how much you can comfortably afford. To calculate your debt-to-income ratio, divide your monthly payments by your monthly gross income.


Use this formula to get an idea of your debt-to-income ratio: A/B = debt-to-income ratio


  • A= Your total monthly payments (such as credit cards, student loans, car loans, or leases; also include an estimated mortgage payment).

  • B= Your average monthly gross income (divide your annual salary by 12).

For example, if your monthly income is $5,000 and your monthly debts and future expenses are $1,000, your debt-to-income ratio would be 20%.


If your debt-to-income ratio is more than 43%, you still may be eligible for a mortgage if another person completes the application with you. We'll ask you for the co-applicant information during the application process.


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