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Citi’s offerings and lending guidelines may differ.","content:disclosures:global-floating-disclosure.json","Global Floating Disclosure","disclosures/global-floating-disclosure.json",{"title":91,"subtext":7,"portraitImage":92,"imageAlt":93,"imageWidth":94,"background":95,"borderRadius":96,"maxWidth":97,"paddingTopBottom":98,"paddingLeftRight":98,"gap":98,"variant":99},"Citi is #1 in Customer Satisfaction with Mortgage Origination - ***[J.D. Power 2025 Award](https://www.jdpower.com/business/awards)***","/media/jdpower-trophy.png","J.D. Power 2025 Trophy",48,"var(--brand-default)",0,650,16,"default",{"data":101,"body":103,"excerpt":-1,"toc":142},{"title":7,"description":102},"Key insights:",{"type":104,"children":105},"root",[106,117,137],{"type":107,"tag":108,"props":109,"children":110},"element","p",{},[111],{"type":107,"tag":112,"props":113,"children":114},"strong",{},[115],{"type":116,"value":102},"text",{"type":107,"tag":118,"props":119,"children":120},"ul",{},[121,127,132],{"type":107,"tag":122,"props":123,"children":124},"li",{},[125],{"type":116,"value":126},"Private mortgage insurance is typically required with a down payment under 20%, but it doesn’t have to last for the life of your loan  ",{"type":107,"tag":122,"props":128,"children":129},{},[130],{"type":116,"value":131},"Federal rules require lenders to automatically cancel PMI at 78% loan-to-value, and many homeowners can request removal earlier at 80%  ",{"type":107,"tag":122,"props":133,"children":134},{},[135],{"type":116,"value":136},"Building equity through regular payments, extra principal contributions or rising home values can help lower your monthly payment by eliminating PMI sooner  ",{"type":107,"tag":108,"props":138,"children":139},{},[140],{"type":116,"value":141},"Private mortgage insurance (PMI) doesn’t have to be forever. Many homeowners have the option of removing it once they’ve built enough equity in their homes, thereby lowering their monthly payments. Here, we’ll walk through when PMI automatically ends, how to remove PMI from a mortgage ahead of schedule and what steps can be taken to help you reach that goal faster.",{"title":7,"searchDepth":143,"depth":143,"links":144},2,[],{"data":146,"body":148,"excerpt":-1,"toc":194},{"title":7,"description":147},"Under the Homeowners Protection Act (HPA), lenders are legally required to cancel PMI once your mortgage balance reaches 78% of your home’s original value—that is, when you’ve built up 22% equity.  ",{"type":104,"children":149},[150,164,169,187],{"type":107,"tag":108,"props":151,"children":152},{},[153,155,162],{"type":116,"value":154},"Under the Homeowners Protection Act (HPA), lenders are legally required to cancel ",{"type":107,"tag":156,"props":157,"children":159},"a",{"href":158},"/home-buying/articles/pmi-home-loan/",[160],{"type":116,"value":161},"PMI ",{"type":116,"value":163},"once your mortgage balance reaches 78% of your home’s original value—that is, when you’ve built up 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payments](/refinancing/articles/how-to-pay-off-your-mortgage-faster/).","PRO TIP",[],{"title":7,"searchDepth":143,"depth":143,"links":195},[],{"data":197,"body":199,"excerpt":-1,"toc":265},{"title":7,"description":198},"You don’t have to wait for your lender to remove PMI automatically. You can actually request it earlier once your loan-to-value ratio (LTV) reaches 80%.  ",{"type":104,"children":200},[201,205,210,228,233,260],{"type":107,"tag":108,"props":202,"children":203},{},[204],{"type":116,"value":198},{"type":107,"tag":108,"props":206,"children":207},{},[208],{"type":116,"value":209},"That means you’ve gained 20% equity in your home through one or more of the following:  ",{"type":107,"tag":118,"props":211,"children":212},{},[213,218,223],{"type":107,"tag":122,"props":214,"children":215},{},[216],{"type":116,"value":217},"Regular monthly payments that reduce principal",{"type":107,"tag":122,"props":219,"children":220},{},[221],{"type":116,"value":222},"Extra payments directly 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value  ",{"type":107,"tag":108,"props":261,"children":262},{},[263],{"type":116,"value":264},"If you meet those conditions, your lender is required to review your request and remove PMI once you qualify.",{"title":7,"searchDepth":143,"depth":143,"links":266},[],{"data":268,"body":270,"excerpt":-1,"toc":312},{"title":7,"description":269},"Rising home values can help you eliminate PMI sooner even if your original mortgage balance hasn’t reached 80% of the purchase price.",{"type":104,"children":271},[272,276,281,299],{"type":107,"tag":108,"props":273,"children":274},{},[275],{"type":116,"value":269},{"type":107,"tag":108,"props":277,"children":278},{},[279],{"type":116,"value":280},"You can request PMI removal based on your home’s current market value, but lenders set specific conditions:  ",{"type":107,"tag":118,"props":282,"children":283},{},[284,289,294],{"type":107,"tag":122,"props":285,"children":286},{},[287],{"type":116,"value":288},"You’ll likely need to pay for a professional 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qualify, here’s what to do:  ",{"type":104,"children":318},[319,323,386],{"type":107,"tag":108,"props":320,"children":321},{},[322],{"type":116,"value":316},{"type":107,"tag":118,"props":324,"children":325},{},[326,336,346,356,366,376],{"type":107,"tag":122,"props":327,"children":328},{},[329,334],{"type":107,"tag":112,"props":330,"children":331},{},[332],{"type":116,"value":333},"Contact your lender or mortgage servicer:",{"type":116,"value":335}," Ask for their PMI removal process and eligibility requirements",{"type":107,"tag":122,"props":337,"children":338},{},[339,344],{"type":107,"tag":112,"props":340,"children":341},{},[342],{"type":116,"value":343},"Confirm your current loan balance and LTV:",{"type":116,"value":345}," You can calculate this by dividing your loan balance by your home’s value  ",{"type":107,"tag":122,"props":347,"children":348},{},[349,354],{"type":107,"tag":112,"props":350,"children":351},{},[352],{"type":116,"value":353},"Gather your payment 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is removed  ",{"type":107,"tag":108,"props":387,"children":388},{},[389,391,397],{"type":116,"value":390}," This process is common, straightforward and clearly regulated. If you’re exploring new home financing or looking to refinance to remove PMI, remember that Citi’s ",{"type":107,"tag":156,"props":392,"children":394},{"href":393},"/home-loans/",[395],{"type":116,"value":396},"home loans",{"type":116,"value":398}," offer a range of mortgages to fit different financial needs.",{"title":7,"searchDepth":143,"depth":143,"links":400},[],{"data":402,"body":404,"excerpt":-1,"toc":471},{"title":7,"description":403},"Yes! A few smart financial moves can help you reach that equity threshold faster. Some things you might try: ",{"type":104,"children":405},[406,410],{"type":107,"tag":108,"props":407,"children":408},{},[409],{"type":116,"value":403},{"type":107,"tag":118,"props":411,"children":412},{},[413,423,433,443,453],{"type":107,"tag":122,"props":414,"children":415},{},[416,421],{"type":107,"tag":112,"props":417,"children":418},{},[419],{"type":116,"value":420},"Make extra payments toward principal:",{"type":116,"value":422}," Even a few hundred dollars per year can accelerate paying your mortgage down enough to qualify  ",{"type":107,"tag":122,"props":424,"children":425},{},[426,431],{"type":107,"tag":112,"props":427,"children":428},{},[429],{"type":116,"value":430},"Recast your mortgage:",{"type":116,"value":432}," This can happen after a large lump-sum payment (such as from a bonus or inheritance)  ",{"type":107,"tag":122,"props":434,"children":435},{},[436,441],{"type":107,"tag":112,"props":437,"children":438},{},[439],{"type":116,"value":440},"Maintain strong credit:",{"type":116,"value":442}," Lenders are more likely to approve early removal when you have a solid payment history  ",{"type":107,"tag":122,"props":444,"children":445},{},[446,451],{"type":107,"tag":112,"props":447,"children":448},{},[449],{"type":116,"value":450},"Track local home price trends:",{"type":116,"value":452}," Rising property values can push your equity higher faster than expected",{"type":107,"tag":122,"props":454,"children":455},{},[456,461,463,469],{"type":107,"tag":112,"props":457,"children":458},{},[459],{"type":116,"value":460},"Consider refinancing:",{"type":116,"value":462}," If interest rates have dropped or your credit has improved, ",{"type":107,"tag":156,"props":464,"children":466},{"href":465},"/refinancing/",[467],{"type":116,"value":468},"refinancing",{"type":116,"value":470}," may eliminate PMI entirely while lowering your rate",{"title":7,"searchDepth":143,"depth":143,"links":472},[],{"data":474,"body":476,"excerpt":-1,"toc":510},{"title":7,"description":475},"Sometimes, PMI sticks around longer than you’d like. Here are some common reasons why: ",{"type":104,"children":477},[478,482,505],{"type":107,"tag":108,"props":479,"children":480},{},[481],{"type":116,"value":475},{"type":107,"tag":118,"props":483,"children":484},{},[485,490,495,500],{"type":107,"tag":122,"props":486,"children":487},{},[488],{"type":116,"value":489},"Late or missed payments disqualify you from early removal",{"type":107,"tag":122,"props":491,"children":492},{},[493],{"type":116,"value":494},"Declining property value based on a new appraisal",{"type":107,"tag":122,"props":496,"children":497},{},[498],{"type":116,"value":499},"High-risk loan classification, such as a recent delinquency or modification",{"type":107,"tag":122,"props":501,"children":502},{},[503],{"type":116,"value":504},"Insufficient equity, even if your payments are current",{"type":107,"tag":108,"props":506,"children":507},{},[508],{"type":116,"value":509},"  If your lender denies removal, they must explain why and what steps are required to requalify, usually improving payment consistency or re-establishing equity through additional payments or rising values.",{"title":7,"searchDepth":143,"depth":143,"links":511},[],{"data":513,"body":514,"excerpt":-1,"toc":522},{"title":7,"description":7},{"type":104,"children":515},[516],{"type":107,"tag":517,"props":518,"children":521},"faq",{":faqs":519,"headline":520},"[{\"question\":\"Does PMI go away at 20% equity?\",\"answer\":\"Lenders are required to remove PMI automatically when you’ve built up 22% equity in your home. 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Power 2025 award information, visit ",{"type":107,"tag":156,"props":556,"children":560},{"href":557,"rel":558},"https://www.jdpower.com/business/awards",[559],"nofollow",[561],{"type":116,"value":562},"jdpower.com/awards",{"type":116,"value":564},".",{"title":7,"searchDepth":143,"depth":143,"links":566},[],{"_path":568,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":99,"content":569,"_id":570,"_type":78,"title":571,"_source":80,"_file":572,"_extension":78},"/disclosures/default","This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.\n\nTerms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.","content:disclosures:default.json","Default","disclosures/default.json",{"_path":574,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"content":575,"slug":576,"_id":577,"_type":78,"title":578,"_source":80,"_file":579,"_extension":78},"/disclosures/spanish-language-disclosure","\u003Csup>†\u003C/sup>Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.\n\n\u003Cspan lang=\"es\">Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.\u003C/span>","spanish-language-disclosure","content:disclosures:spanish-language-disclosure.json","Spanish Language Disclosure","disclosures/spanish-language-disclosure.json",{"data":581,"body":583,"toc":594},{"title":7,"description":582},"This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.",{"type":104,"children":584},[585,589],{"type":107,"tag":108,"props":586,"children":587},{},[588],{"type":116,"value":582},{"type":107,"tag":108,"props":590,"children":591},{},[592],{"type":116,"value":593},"Terms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.",{"title":7,"searchDepth":143,"depth":143,"links":595},[],{"data":597,"body":599,"toc":622},{"title":7,"description":598},"†Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":104,"children":600},[601,612],{"type":107,"tag":108,"props":602,"children":603},{},[604,610],{"type":107,"tag":605,"props":606,"children":607},"sup",{},[608],{"type":116,"value":609},"†",{"type":116,"value":611},"Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":107,"tag":108,"props":613,"children":614},{},[615],{"type":107,"tag":616,"props":617,"children":619},"span",{"lang":618},"es",[620],{"type":116,"value":621},"Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.",{"title":7,"searchDepth":143,"depth":143,"links":623},[],{"data":625,"body":627,"excerpt":-1,"toc":649},{"title":7,"description":626},"If you’ve been steadily paying down your mortgage, mortgage insurance cancellation often happens around the midpoint of your loan term, though it can come sooner if you’ve made extra payments.",{"type":104,"children":628},[629],{"type":107,"tag":108,"props":630,"children":631},{},[632,634,640,642,648],{"type":116,"value":633},"If you’ve been steadily paying down your mortgage, ",{"type":107,"tag":156,"props":635,"children":637},{"href":636},"/home-buying/articles/mortgage-insurance/",[638],{"type":116,"value":639},"mortgage insurance",{"type":116,"value":641}," cancellation often happens around the midpoint of your loan term, though it can come sooner if you’ve made ",{"type":107,"tag":156,"props":643,"children":645},{"href":644},"/refinancing/articles/how-to-pay-off-your-mortgage-faster/",[646],{"type":116,"value":647},"extra payments",{"type":116,"value":564},{"title":7,"searchDepth":143,"depth":143,"links":650},[],[652,721,777,824,885,918,972],{"_path":653,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":655,"l1":654,"linkNav":656,"heroMedia":660,"teaserImage":663,"slug":665,"sections":666,"date":697,"subheadline":698,"headline":699,"isFeatured":6,"tags":700,"link":703,"seo":706,"hasSectionNavigation":27,"_id":709,"_type":78,"title":710,"_source":80,"_file":711,"_extension":78,"tagsDetails":712},"/articles/home-buying/mortgage-self-employed","home-buying",7,{"introText":657,"text":658,"to":659},"Ready for the next step?","Connect with a Citi Specialist","#leadform",{"portrait":661,"landscape":662},"/media/howgetmortgage-selfemployed-dsk.png","/media/howgetmortgage-selfemployed-mob.png",{"src":664},"/media/howgetmortgage-selfemployed-teaser.jpg","mortgage-self-employed",[667,670,673,676,679,682,685,688,691,694],{"title":668,"hideTitle":27,"content":669},"Disclaimer","**Disclaimer:** Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":671,"content":672},"What counts as “self-employed”?","When lenders talk about being self-employed, they mean a wide range of work situations, from\npart-time gig workers to full-time business owners. You’re generally considered\nself-employed if you’re: \n\n* **A sole proprietor:** You own and run the business yourself, and the business isn’t legally\n  separate from you. Income and expenses typically show up on your personal tax\n  return. \n* **A freelancer or independent contractor who receives 1099 forms:** You work for yourself rather than for\n  a single employer, often taking on projects or clients throughout the year.\n  Instead of a W-2, clients report what they pay you on 1099 forms. \n* **An owner of an LLC or partnership:** You share ownership of a business with one or more people or operate through\n  a limited liability company. The way you get paid depends on how the business\n  is set up. \n* **A business owner with a significant ownership stake:** You may get a regular\n  paycheck, but because you own a large portion of the business, lenders still\n  look at how the company’s doing when reviewing your mortgage application. \n\nIf you don’t pocket the same amount on a predictable biweekly schedule, you’re not alone. Income swings are normal when you work for yourself, and lenders take that into\naccount when reviewing your application.",{"title":674,"content":675},"How mortgages work for self-employed borrowers","When lenders for a [mortgage](/home-loans/articles/what-is-a-mortgage/) review an application, they’re not\nfocused on job titles. Instead, they want to understand whether your income can\nreliably support a home loan over time. \n\nTo do that, lenders usually look at your earnings over the past one to two years and calculate an average. If your income has stayed steady or grown, that can work in your favor. If it’s dipped at times, lenders may ask a few follow-up questions to better understand why. \n\nAnother factor that comes into play? Tax deductions. While deductions help reduce your\ntax bill, they can lower the income lenders use when determining how big of a loan you qualify for. It’s one reason self-employed borrowers might need to plan a bit further ahead.",{"title":677,"content":678},"Key requirements for a self-employed mortgage","Every mortgage application is different, but lenders generally look for a few common signals of financial stability:\n\n* **A steady income history:** Lenders usually like to see a track record of self-employed income, often going back about 2 years.\n* **Good credit:** Your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) and history help lenders see how you’ve managed credit in the past. Strong credit can be especially helpful for self-employed borrowers because it shows reliability, even when income isn’t perfectly predictable.\n* **Manageable debt:** Lenders look closely at your [debt-to-income ratio (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio/), which compares your monthly debt obligations to your income. A lower DTI may make a lender feel more comfortable that you can take on a mortgage alongside your other financial responsibilities.\n* **Consistent or growing business revenue:** Lenders focus on patterns, not one standout month. Steady earnings (or income that trends upward over time) can show that your business is solid.\n* **An active business:** Lenders want to confirm that your business is currently operating and earning money so you can pay back what you borrow.\n\nRemember: You don’t need your finances to be perfect. The goal is to show that your income, even if it varies month to month, is dependable over time.",{"title":680,"content":681},"What documents do lenders typically require?","When you’re self-employed, lenders usually ask for a few more documents than they would from someone with a traditional paycheck. That can feel stressful at first, but it’s completely normal. Lenders are just trying to get a better idea of your income and business.\n\nYou might be asked to show:\n\n* Personal tax returns from the past 2 years\n* Business tax returns from the past 2 years\n* Year-to-date profit and loss statements\n* Balance sheets\n* Personal and business bank statements\n* A business license, if applicable\n* Verification letters from a CPA, in some cases\n\nHaving these documents organized and responding promptly can help the process feel smoother and less overwhelming.",{"title":683,"content":684},"How to improve your chances of approval","A little preparation can make a big difference. Before applying, consider taking these steps:\n\n* **Review your credit early:** This gives you time to address any issues, like a mistake on your report\n* **Reduce outstanding debt:** Lower balances can show lenders you’re ready to take on a mortgage\n* **Separate business and personal finances:** Clear records make it easier for lenders to review your income\n* **Be mindful of tax deductions:** Large write-offs can limit qualifying income\n* **Build cash reserves:** Savings can help show stability during slower months\n* **Share current financials:** Up-to-date statements help tell your story",{"title":686,"content":687},"What challenges do self-employed borrowers commonly face?","Self-employed borrowers often face a few common challenges during the mortgage process, but the good news is that each one can be addressed with the right preparation. \n\n### Income that changes month to month\n\nThis is common for self-employed borrowers. Lenders usually look at longer-term income trends rather than any single month to understand how your business is doing. \n\n### Tax deductions that lower qualifying income \n\nDeductions can reduce the income lenders use for qualification. Planning ahead can help set clear expectations and avoid surprises. For instance, you might choose not to take a big deduction on new office equipment the same year you’re planning to buy a home. \n\n### Requests for additional documents\n\nFollow-up questions and document requests are a normal part of the process, not red flags. They help lenders build a complete picture of how your income works. When you get these requests, being quick and responsive can help move your application along.\n\n### A newer business \n\nIf your business hasn’t been operating for long, lenders may take a closer look. Consistent records and proof of ongoing activity can help demonstrate stability.\n\nWhile these challenges can feel frustrating, they’re also very common. With clear records and timely responses, most issues can be addressed without derailing your timeline.",{"title":689,"content":690},"Are there self-employed-friendly loan options available? ","If you’re self-employed, certain loan options may offer a bit more flexibility, depending on your financial situation:\n\n* **[FHA loans](/home-loans/fha-loan/):** These government-backed loans often allow more flexibility around credit history and qualifying requirements.\n* **Bank statement loans (where available):** Some lenders may review personal or business bank statements instead of tax returns to get a better idea of cash flow, which can be helpful if deductions reduce your reported income.\n* **Non-qualified mortgage loans:** These loans fall outside traditional lending rules and might rely on alternative documentation, like bank statements, to show income that doesn’t come from a regular paycheck. Just remember, though: These types of loans don’t fall under Consumer Financial Protection Bureau (CFPB) protections and may involve higher down payments or interest rates.\n* **Programs like the** [**Citi HomeRun**® **mortgage**](/home-loans/home-run/)**:** Designed to support eligible buyers, these mortgage options have more flexible credit guidelines, especially when your income doesn’t come from a traditional paycheck. \n\n::card{eyebrowIcon=\"\" body=\"There’s plenty more to explore.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" headline=\"Don’t see the right home loan for you?\" backgroundColor=\"\" icon=\"Homebuyer\" link=\"/home-loans/\" ctaText=\"Explore home loans\"}\n::",{"title":692,"content":693},"How to apply for a mortgage when you’re self-employed","Breaking the mortgage process into smaller steps can make it feel far more approachable, especially when you’re self-employed. Here’s how it typically unfolds:\n\n1. **Take a close look at your income and credit:** Start by reviewing your recent income trends and credit profile so you have a clear sense of where you stand. This can help you spot any areas you may want to address before applying.\n2. **Gather key documents early:** Pull together tax returns, financial statements and bank records ahead of time. Having everything ready can help keep the process smooth when it comes time to apply.\n3. **Get [prequalified or pre-approved](/home-buying/articles/prequalified-vs-pre-approved/):** This step gives you a better idea of your price range and shows sellers that you’re serious and prepared.\n4. **Submit your application and documents:** Once you apply, you’ll share the supporting paperwork lenders need to review your income and finances in more detail.\n5. **Respond quickly to follow-up requests:** It’s common for lenders to ask questions or request additional documents. Quick responses can help keep things on track.\n6. **Review final documents and close:** Before [closing](/tags/closing/), you’ll review the final paperwork and confirm the details. Once everything’s signed and you’ve made your down payment, you’re on your way to homeownership.\n\n::card{eyebrowIcon=\"\" body=\"The Citi SureStart Pre-Approval comes with a firm commitment to lend.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" :isInlineCard=false headline=\"Ready to get pre-approved?\" backgroundColor=\"\" icon=\"Penpaper\" link=\"https://www.citi.com/mortgage/surestart-preapproval\" ctaText=\"Learn More\"}\n::\n\n::disclaimer-dialog{buttonCopy=\"Citi SureStart® Terms & Conditions\" :dialogCopy='\"## Citi SureStart® Terms & Conditions\\n\\nSureStart® Pre-Approval is a registered service mark of Citigroup Inc. Final commitment is subject to verification of information, receipt of a satisfactory sales contract on the home you wish to purchase, appraisal and title report, and meeting our customary closing conditions. There is no charge to receive a SureStart® Pre-Approval. However, standard application and commitment fees will apply for the mortgage loan application.\"'}\n::",{"title":695,"content":696,"hideTitle":27},"Self-employed Mortgage FAQs","::faq{:faqs='[{\"question\":\"Can I get approved for a mortgage if I’m self-employed?\",\"answer\":\"Yes. You may need to provide some additional documentation, like business and personal tax returns from the last 2 years, but it’s possible to get a mortgage if you’re self-employed.\"},{\"question\":\"How do I prove self-employment income for a mortgage?\",\"answer\":\"Lenders usually look at tax returns, bank statements, profit-and-loss statements and balance sheets to understand your self-employment income. They may ask for more information if they have questions about your earnings.\"},{\"question\":\"How long do I need to be self-employed to qualify for a mortgage?\",\"answer\":\"Many lenders like to see consistent income for 2 years, but requirements vary. Check with your mortgage lender if you’re not sure you qualify.\"}]' headline=\"Self-employed Mortgage FAQs\"}\n::","2026-03-12T08:45:00.000Z","Key insights:\n\n* Being self-employed doesn’t prevent you from getting a mortgage, but lenders may take a closer look at how your income has performed over time\n* Preparing clear, well-organized financial documents can make the approval process smoother and reduce back-and-forth with lenders\n* Choosing the right loan type and planning ahead can improve your chances of qualifying on terms that work for you\n\nThere’s a lot to love about running your own business. Flexibility? Check. Independence? Check. The freedom to work on your terms? Check. But when it’s time to buy a home, many freelancers, entrepreneurs and gig workers ask the same question: Will being self-employed make getting a mortgage harder?","How to get a mortgage when you’re self-employed",[701,702],"home-loans","loan-types",{"introText":704,"body":705,"text":658,"to":659},"Self-employed and need help with a mortgage? We’re here to guide you.","We’re here to guide you.",{"title":707,"description":708},"How to Get a Mortgage When You’re Self-Employed | Mortgage.com","Explore how self-employed borrowers can qualify for a mortgage, what income documentation lenders review and how to prepare for a smoother approval process.","content:articles:home-buying:mortgage-self-employed.json","Mortgage Self Employed","articles/home-buying/mortgage-self-employed.json",[713,717],{"label":714,"slug":702,"seo":715},"Loan Types",{"description":716},"Explore resources about loan types—including types, requirements, and how to choose the right mortgage option.",{"label":718,"slug":701,"seo":719},"Home Loans",{"description":720},"Explore resources about home loans—including types, requirements, and how to choose the right mortgage option.",{"_path":722,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":723,"l1":654,"linkNav":724,"heroMedia":726,"teaserImage":729,"slug":731,"sections":732,"date":754,"subheadline":755,"headline":756,"isFeatured":6,"tags":757,"link":759,"seo":762,"hasSectionNavigation":27,"_id":765,"_type":78,"title":766,"_source":80,"_file":767,"_extension":78,"tagsDetails":768},"/articles/home-buying/how-to-buy-a-house-with-low-income",3,{"introText":657,"text":658,"to":725},"/contact",{"landscape":727,"portrait":728},"/media/how-to-buy-a-house-w-low-income-mobile-768x512.jpg","/media/how-to-buy-a-house-w-low-income-desktop-520x638.jpg",{"src":730},"/media/how-to-buy-a-house-w-low-income-teaser-500x500.jpg","how-to-buy-a-house-with-low-income",[733,736,739,742,745,748,751],{"title":734,"content":735},"Is it possible to buy a home on a low income?","You don’t need a high salary to become a homeowner. Lenders look at more than just paychecks when reviewing your application, and  there are low-income mortgage programs and assistance options designed specifically for buyers with limited earnings.\n\nYour approval odds improve when you strengthen factors like your [debt-to-income (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) ratio, [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/), employment history and savings. Strengthening these areas can improve your approval odds, and many buyers successfully combine a [government-backed loan](/home-buying/articles/government-backed-home-loans/) with down payment assistance to make their first home both attainable and affordable.",{"title":737,"content":738},"Loan programs that help low-income buyers","Low-income mortgage loans have unique requirements and benefits. Here are some of the most widely used:\n\n::inline-table{tableLayout=\"waffle\" :headers='[{\"value\":\"Loan Program\"},{\"value\":\"Best For\"},{\"value\":\"Key Benefits\"}]' :rows='[{\"column\":{\"valueOne\":\"FHA Loans\",\"valueTwo\":\"Buyers with lower credit scores (580+ for 3.5% down; 500-579 with 10% down) or limited savings\",\"valueThree\":\"Down payments as low as 3.5%. Flexible credit requirements. Allows higher debt-to-income ratios.\"}},{\"column\":{\"valueOne\":\"USDA Loans\",\"valueTwo\":\"Buyers in eligible rural/suburban areas with income within USDA limits\",\"valueThree\":\"No down payment. Competitive fixed rates. May cover closing costs.\"}},{\"column\":{\"valueOne\":\"VA Loans\",\"valueTwo\":\"Eligible veterans, active-duty members or qualifying surviving spouses \",\"valueThree\":\"No down payment or private mortgage insurance required. Lower funding fees for some borrowers.\"}},{\"column\":{\"valueOne\":\"State/Local Down Payment Assistance\",\"valueTwo\":\"First-time or income-qualified buyers (limits vary by program)\",\"valueThree\":\"Grants or forgivable loans to cover down payment and/or closing costs\"}}]'}\n::",{"title":740,"content":741},"Understanding down payment assistance programs ","If covering the [down payment](/tags/down-payments/) or [closing costs](/home-buying/articles/closing-costs/) is holding you back, down payment assistance programs (DPAs) can help bridge the gap. DPAs provide funds either as grants or low-interest loans to help cover these costs. They’re offered through state and local governments, nonprofits and even some employers.\n\nEligibility requirements vary, but many programs are designed for:\n\n* **First-time home buyers**: A first-time home buyer is often defined as someone who hasn’t owned a home in the past three years. Our [first-time home buyer guide](/home-buying/articles/first-time-home-buyer/) looks in-depth at who qualifies, loan options, tips, and more.\n* **Buyers within certain income limits**: These limits depend on your location and household size, and may be higher than you might expect.\n* **Homes under a purchase price cap:** This will typically be based on the median home price in your area.\n\nWhere to start:\n\n* Visit your state housing agency’s website for program listings and requirements.\n* Check HUD’s network of [local housing counseling agencies](https://www.hud.gov/i_want_to/talk_to_a_housing_counselor). If you’re already working with a lender, ask whether they partner with any down payment assistance providers. They may be able to connect you directly during pre-approval.\n\n::callout{body=\"Some down payment assistance programs have income limits well above what most consider “low income.” You might qualify even if you earn close to your area’s median income.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::",{"title":743,"content":744},"Tips to strengthen your mortgage application","A strong application can help you secure a better interest rate and lower monthly payments —even if you qualify for a low-income home loan. Here are some ways you can set yourself up for success:\n\n* **Boost your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/)**:  Pay down revolving balances, fix errors on your credit report and review our guide on [buying a house with bad credit](/home-loans/articles/how-to-buy-a-house-with-bad-credit/).\n* **Lower your debt-to-income ratio:** Eliminating even small debts can make a big difference—learn more about **[how your debt-to-income ratio affects mortgage approval](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)** to understand where you stand and how to improve it.\n* **Consider a co-borrower**: Adding another trusted person with steady income can increase your buying power.\n* **Show income stability:** Maintain steady employment and gather proof like W-2s, pay stubs and tax returns before applying.",{"title":746,"content":747},"Other costs to prepare for","Strong finances at the time of purchase are just part of the equation. Planning for ongoing and upfront expenses is equally important. Here are common costs to budget for:\n\n::content-table{headline=\"Additional costs of buying a home\" body=\"Be sure to include these in your budget.\" :tableData='[{\"row\":[{\"column\":\"Cost\"},{\"column\":\"Estimated Range\"}]},{\"row\":[{\"column\":\"Home inspection \"},{\"column\":\"$300-$500\"}]},{\"row\":[{\"column\":\"Appraisal \"},{\"column\":\"$300-$600\"}]},{\"row\":[{\"column\":\"Homeowners insurance \"},{\"column\":\"$1,000-$1,500/year\"}]},{\"row\":[{\"column\":\"Closing costs \"},{\"column\":\"2-5% of purchase price\"}]}]'}\n::\n\nWant to better understand closing costs? Check out our [guide on closing costs](/home-buying/articles/closing-costs/)—what they include,  how they’re calculated and ways to reduce them.",{"title":749,"content":750},"Common mistakes to avoid","Even the best low-income mortgage program can’t protect you from costly missteps. Here’s what to watch for:\n\n**Skipping [pre-approval](/home-loans/articles/how-to-get-pre-approved/)**\n\nWithout it, you may not know your true budget. Use our [Mortgage Calculator](/calculators/monthly/) to get a sense of what you might qualify for.\n\n**Overestimating your budget**\n\nJust because you’re approved for a certain amount doesn’t mean you should spend it all. Aim for a [monthly payment](/calculators/monthly/) that still leaves room for savings and emergencies. Our [Affordability Calculator](/calculators/affordability/) is a great place to start.\n\n**Ignoring assistance programs**\n\nMany buyers miss out on thousands in grants or low-interest loans simply because they don’t research what’s available.\n\n**Overlooking ongoing costs**\n\nFactor in property taxes, insurance, HOA fees and maintenance before you buy.\n\n**Rushing the process**\n\nTaking time to improve your credit, pay down debt and save can help you get better terms and more long-term stability.",{"title":752,"hideTitle":27,"content":753},"Buying a home with a low income FAQs","\n\n::faq{headline=\"Buying a home with a low income FAQs\" :faqs='[{\"question\":\"Can I buy a house with no down payment?\",\"answer\":\"Yes. Certain loan programs, like USDA loans (for rural and some suburban areas) and VA loans (for qualifying service members, veterans and some surviving spouses) offer 100% financing with no down payment required.\"},{\"question\":\"What is the minimum income required to qualify for a mortgage?\",\"answer\":\"There’s no set income threshold. Lenders look at your overall financial picture, including your debt-to-income (DTI) ratio, credit score and employment history, to determine how much you can afford to borrow.\"},{\"question\":\"What credit score do I need for a low-income loan?\",\"answer\":\"FHA loans accept credit scores as low as 580 with a 3.5% down payment. Some lenders may approve lower scores with a higher down payment or additional compensating factors.\"},{\"question\":\"Are there programs that help with down payments?\",\"answer\":\"Yes—down payment assistance programs from state and local agencies, nonprofits and even some employers offer grants or low-interest loans to help cover part or all of your down payment and sometimes closing costs.\"},{\"question\":\"Can I get a co-signer if I don’t qualify alone?\",\"answer\":\"Yes. A co-signer (or co-borrower) with stronger finances can help you meet income or credit requirements. Just remember, they’re equally responsible for the loan.\"}]'}\n::","2025-09-08T13:31:00.000Z","[Buying a home](/home-buying/) on a modest income can feel daunting, but it’s far from impossible. This guide covers the most common home loans for low-income buyers, with tips to boost your eligibility and a range of resources—whether you’re a first-time home buyer navigating the process or a returning buyer ready to invest again.","How to buy a house with low income",[654,702,758],"budget-planning",{"introText":760,"body":761,"text":658,"to":725},"Need help navigating low-income loan options?","Let’s talk it through together.",{"title":763,"description":764},"Buying Your Home On a Low Income | Citi Mortgage","Learn how to buy a home with low income, including loan options, programs, and tips that can help make homeownership possible.","content:articles:home-buying:how-to-buy-a-house-with-low-income.json","How To Buy A House With Low Income","articles/home-buying/how-to-buy-a-house-with-low-income.json",[769,713,773],{"label":770,"slug":758,"seo":771},"Budget Planning",{"description":772},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":774,"slug":654,"seo":775},"Home Buying",{"description":776},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"_path":778,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":779,"l1":654,"linkNav":780,"heroMedia":781,"teaserImage":784,"slug":786,"disclosure":99,"sections":787,"date":809,"subheadline":810,"headline":811,"dateModified":812,"isFeatured":6,"tags":813,"link":814,"seo":817,"hasSectionNavigation":27,"_id":820,"_type":78,"title":821,"_source":80,"_file":822,"_extension":78,"tagsDetails":823},"/articles/home-buying/what-is-cost-of-living",5,{"introText":657,"text":658,"to":725},{"landscape":782,"portrait":783},"/media/cost-of-living-mobile-768x512.jpg","/media/cost-of-living-desktop-520x638.jpg",{"src":785},"/media/cost-of-living-teaser-500x500.jpg","what-is-cost-of-living",[788,791,794,797,800,803,806],{"title":789,"content":790},"What does “cost of living” mean?","Think of cost of living as a snapshot of how far your income goes in one location versus another. For example, in some cities, an income of $2,500 a month might cover rent, groceries and your car payment. In other places, that amount may barely cover housing. Calculating cost of living is a practical way to set realistic expectations when budgeting, job hunting or planning a move.",{"title":792,"content":793},"How is cost of living calculated?","Most cost-of-living indexes compare a selection of major spending categories to show how affordable (or not) one place is compared to another.\n\n::card{eyebrowIcon=\"\" body=\"Curious what life might cost in a new city? Our Cost-Of-Living Calculator may help.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" :isInlineCard=false headline=\"Compare cost of living with our free calculator\" backgroundColor=\"\" icon=\"Calculator\" link=\"/calculators/cost-of-living/\" ctaText=\"Learn More\"}\n::\n\n### What’s included in cost-of-living estimates?\n\nA common misconception is that housing is the only cost that matters—but it's just one part of the equation. A true cost-of-living comparison takes into account all of the major expenses that impact your daily life. Cost of living often varies depending on the source, but here’s what typically gets factored in: \n\n* **Housing:** Rent or mortgage payments, property taxes and homeowners or renters insurance. \n* **Groceries:** Basic food and household items like milk, meat, produce and cleaning supplies. \n* **Utilities:** Monthly bills for electricity, natural gas, water, garbage collection, phone, internet and cable service. \n* **Transportation:** Car payments, gas, car insurance or public transit fares.\n* **Healthcare:** Out-of-pocket expenses for medical care, insurance premiums, prescriptions and routine care. \n* **Taxes:** Local and state income, property and sales tax rates—all of which can impact take-home pay and everyday expenses. \n\nOther categories that may be included are: \n\n* **Childcare and education:** Daycare, babysitters and school fees.\n* **Miscellaneous/personal spending:** Clothing, entertainment, dining and other flexible personal expenses. \n\n###  Who calculates cost of living? \n\nCost-of-living comparisons are compiled by several trusted organizations—some government, some academic and some designed with consumers in mind. Each one offers a different perspective on everyday costs across the U.S. Here’s a quick guide to some of the most reliable sources: \n\n* **Bureau of Labor Statistics:** Tracks national price trends through the Consumer Price Index—a key measure of inflation and cost-of-living changes over time. \n* **Council for Community and Economic Research:** Publishes the Cost of Living Index, which compares prices in more than 300 U.S. cities across categories like housing, groceries and transportation. \n* **MIT Living Wage Calculator:** Estimates the income needed to meet basic expenses by location and household size. \n* **Bureau of Economic Analysis:** Provides Regional Price Parities, which show how prices vary from state to state and city to city, helping you compare purchasing power across regions.",{"title":795,"content":796},"Cost of living by state (2025 data)","One of the easiest ways to compare costs across the country is by using the Cost of Living Index, published by the Council for Community and Economic Research. Each location receives a score based on how its prices stack up against the national average, which is set at 100. \n\n* A score above 100 means the area is more expensive than average.\n* A score below 100 means it’s more affordable. \n\nThis index takes into account everyday expenses like housing, groceries, transportation and healthcare, giving you a well-rounded view of local costs.\n\n### Cost-of-living trends \n\nWhen you zoom out and look at the national picture, some clear patterns emerge. The Northeast and West Coast are typically the most expensive, driven by high housing costs, local taxes and elevated wages in dense urban centers. Meanwhile, the Midwest and South tend to be more budget friendly thanks to lower housing costs and generally modest tax rates. And Sunbelt states like Florida, Texas and Tennessee often land just above the national average, offering a mix of affordability and strong job growth—especially in areas that don’t charge state income tax. \n\n### Highest cost of living states \n\nThe states with the highest cost of living include Hawaii, Alaska, California, Massachusetts, New York and Washington, D.C. Hawaii regularly tops the list, with prices for housing and groceries well above average. In California and New York, high housing demand, income taxes and expensive services drive up the overall cost of living. For example, California’s state income tax tops out at 13.3% for those whose annual household income is $1 million or more, the highest in the country. \n\n### Lowest cost of living states \n\nThe best states for cost of living—like West Virginia, Oklahoma and Kansas—consistently rank among the most affordable places to live. These states offer housing prices 20-30% below the national median and boast lower costs for essentials like food, utilities and healthcare. Oklahoma also has no state-level property tax, and both Oklahoma and West Virginia have relatively low income tax rates, helping stretch your take-home pay. \n\n### States with the highest cost of living\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Rank\"},{\"value\":\"State\"},{\"value\":\"Index #\"}]' :rows='[{\"column\":{\"valueOne\":\"1\",\"valueTwo\":\"Hawaii\",\"valueThree\":\"179.7\"}},{\"column\":{\"valueOne\":\"2\",\"valueThree\":\"150.8\",\"valueTwo\":\"Massachusetts\"}},{\"column\":{\"valueTwo\":\"California\",\"valueThree\":\"136.7\",\"valueOne\":\"3\"}},{\"column\":{\"valueTwo\":\"District of Columbia\",\"valueThree\":\"135.2\",\"valueOne\":\"4\"}},{\"column\":{\"valueOne\":\"5\",\"valueTwo\":\"Alaska\",\"valueThree\":\"127.7\"}}]'}\n::\n\n### States with the lowest cost of living  \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Rank\"},{\"value\":\"State\"},{\"value\":\"Index #\"}]' :rows='[{\"column\":{\"valueTwo\":\"Oklahoma \",\"valueThree\":\"84.4\",\"valueOne\":\"1\"}},{\"column\":{\"valueTwo\":\"Mississippi\",\"valueThree\":\"85.5\",\"valueOne\":\"2\"}},{\"column\":{\"valueTwo\":\"Alabama\",\"valueOne\":\"3\",\"valueThree\":\"87.9\"}},{\"column\":{\"valueTwo\":\"West Virginia\",\"valueOne\":\"4\",\"valueThree\":\"88.1\"}},{\"column\":{\"valueTwo\":\"Kansas\",\"valueThree\":\"88.9\",\"valueOne\":\"5\"}}]'}\n::\n\nSource: [Missouri Economic Research and Information Center](https://meric.mo.gov/data/cost-living-data-series?). Last updated Q3 2025.",{"title":798,"content":799},"Comparing cost of living by city","Cost of living can vary just as much between cities as it does between states—sometimes even more. Large metro areas like New York City and San Francisco routinely rank among the most expensive in the country, driven by sky-high rent, steep taxes and pricey everyday essentials. In contrast, rapidly growing cities like Austin and Tampa offer more affordable living, thanks to lower housing costs and no state income tax.\n\nCost of living examples: NYC vs. Austin\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Expense category\"},{\"value\":\"New York City\"},{\"value\":\"Austin\"}]' :rows='[{\"column\":{\"valueOne\":\"Rent\",\"valueTwo\":\"$4,110.30\",\"valueThree\":\"$2,046.24\"}},{\"column\":{\"valueOne\":\"Basic utilities\",\"valueTwo\":\"$182.32\",\"valueThree\":\"$173.55\"}},{\"column\":{\"valueOne\":\"Income taxes\",\"valueTwo\":\"State income tax up to 10.9%\",\"valueThree\":\"No state income tax\"}}]'}\n::\n\nEven within the same state, the cost of living can vary a lot. For example, moving from Albany to NYC or Fresno to San Francisco could raise your expenses significantly. That’s why it pays to compare individual metro areas—not just states—so you can gain a clear idea of how far your budget might go in different areas.",{"title":801,"content":802},"How location affects affordability","It’s not just about how much you earn—it’s how far your money goes. A $60,000 salary might comfortably cover the essentials in San Antonio but fall short in San Francisco. That’s why understanding the cost of living is key when planning a move or switching jobs. \n\nWith more people working remotely, many are choosing to live in lower-cost cities while keeping higher-paying jobs in expensive metro areas—gaining more space, savings and overall higher quality of life.",{"title":804,"content":805},"What affects cost of living the most?","Housing tops the list. Rent or mortgage payments make up the largest portion of a household budget. For example, average monthly rent in San Jose is around $3,000—more than double the $1,450 average in Cincinnati. \n\nTaxes are another major expense. States like Texas, Florida and Alaska don’t tax income, but they often make up for it with higher property or sales taxes. In contrast, residents of New York and California may pay 9-10% in state income taxes. Healthcare and childcare costs also vary widely by region. For young families, childcare alone can add thousands of dollars per year. \n\nBroad economic factors like inflation and supply chain disruptions can also impact everyday costs. For instance, in July 2025, gas prices in California increased to an average of $4.31 per gallon—far above the national average—due to various supply chain constraints. Even as national inflation trends ease, local challenges can continue to push prices higher.\n\nFor homebuyers, mortgage terms can significantly influence long-term affordability. Factors like interest rates, down payment requirements and loan structure all affect how manageable monthly housing costs are. Exploring different mortgage options, such as Citi’s [home loan](/home-loans/) offerings, may help align housing costs with your broader cost-of-living budget.",{"title":807,"content":808,"hideTitle":27},"Cost of Living FAQs","::faq{:faqs='[{\"question\":\"What does cost of living mean?\",\"answer\":\"Cost of living is the amount of money needed to cover essential expenses like housing, food, transportation and healthcare in a specific city or region. It’s a key factor in determining how affordable a location is, and it helps you compare locations when considering a move or a new job.\"},{\"question\":\"How do I compare cost of living between cities?\",\"answer\":\"You may be able to use our Cost-of-Living Calculator to compare expenses in different cities. You can also consult tools like the Cost of Living Index, published by the Council for Community and Economic Research, which compares prices across more than 300 U.S. metro areas. These tools help you estimate how your expenses will change if you move.\"},{\"question\":\"What is cost of living: core components in estimates\",\"answer\":\"Typical cost-of-living estimates include major budget categories like housing, groceries, utilities, transportation, healthcare and taxes. Depending on the source, they may also factor in childcare and other everyday costs.\"},{\"question\":\"What is the most expensive state to live in?\",\"answer\":\"As of 2025, Hawaii has the highest cost of living in the U.S. Housing costs, grocery prices and everyday goods are well above the national average due to geographic isolation and limited supply chains.\"},{\"question\":\"Does cost of living affect salary?\",\"answer\":\"Yes, cost of living usually impacts salary offers. Employers in higher-cost cities typically offer increased compensation to help cover higher expenses like rent, transportation and local taxes. If you’re relocating, it’s a good idea to factor in both salary and cost of living to understand your true buying power.\"}]' headline=\"Cost of Living FAQs\"}\n::","2025-07-28T07:58:00.000-07:00","**Key insights:** \n\n* Cost of living is how much money you need to cover necessary costs in a given place \n* The prices of housing, groceries, utilities and more factor into an area’s cost of living \n* Comparing cost of living in different states and cities can help you plan for a move or decide whether to take a new job \n\nCost of living is how much money it takes to cover your daily expenses, like housing, groceries, healthcare, transportation and taxes, in a specific location. Whether you’re relocating, switching jobs or just curious how your money stacks up, a cost-of-living comparison by state or city can help you plan smarter for your next move.","What is cost of living? A state and city breakdown","2026-04-01T14:19:00.000Z",[654,758],{"introText":815,"body":816,"text":658,"to":725},"Planning a Move?","We can help you explore options that fit your budget.",{"title":818,"description":819},"What Is Cost of Living? State Comparison Guide | Mortgage.com","Understand what cost of living means and how it varies by state and city. Learn how to compare expenses with cost of living before making a move.","content:articles:home-buying:what-is-cost-of-living.json","What Is Cost Of Living","articles/home-buying/what-is-cost-of-living.json",[769,773],{"_path":825,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":826,"l1":654,"linkNav":827,"heroMedia":828,"teaserImage":831,"outro":7,"slug":833,"sections":834,"date":861,"subheadline":862,"headline":863,"isFeatured":6,"tags":864,"link":867,"seo":870,"hasSectionNavigation":27,"_id":873,"_type":78,"title":874,"_source":80,"_file":875,"_extension":78,"tagsDetails":876},"/articles/home-buying/what-credit-score-do-you-need-to-buy-a-house",9,{"introText":657,"text":658,"to":725},{"landscape":829,"portrait":830},"/media/article-what-credit-score-do-you-need-to-buy-a-house_-mobile-768x512.jpg","/media/article-what-credit-score-do-you-need-to-buy-a-house_-mobile-desktop-520x638.jpg",{"src":832},"/media/article-what-credit-score-do-you-need-to-buy-a-house_-mobile-teaser-500x500.jpg","what-credit-score-do-you-need-to-buy-a-house",[835,837,840,843,846,849,852,855,858],{"title":668,"hideTitle":27,"content":836},"Disclaimer: Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":838,"content":839},"Why your credit score matters when buying a home","Lenders use your credit score to gauge how you’ve handled debt in the past and how likely you are to repay what you borrow. [FICO®](https://www.myfico.com/) credit scores range from 300 to 850, but the ideal credit score to purchase a home depends on the type of loan you’re applying for—from zero credit requirements to scores of 700 or more.\n\n::disclaimer-dialog{buttonCopy=\"FICO Terms & Conditions\" :dialogCopy='\"## FICO® Terms & Conditions\\n\\nFICO and “The score lenders use” are registered trademarks of Fair Isaac Corporation in the United States and other countries. Your FICO® Score is provided for your own non-commercial personal review, use and benefit. Citi and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Citi and Fair Isaac do not provide ‘credit repair’ services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.\\n\\nYour FICO Score is calculated based on data from your Equifax credit report using the FICO Bankcard Score 8 model and may be different from other credit scores. FICO Score(s) are intended for and delivered only to the Primary cardmember and only if a FICO Score is available. Disclosure of this score is not available for all Citi products and Citi may discontinue displaying the score at our discretion.\\n\\nFICO and “The score lenders use” are registered trademarks of Fair Isaac Corporation in the United States and other countries. Your FICO Score is provided for your own non-commercial personal review, use and benefit. Citi and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Citi and Fair Isaac do not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.\"'}\n::\n\nIn general, the higher your credit score, the lower your interest rate, which could save you thousands of dollars over the life of your loan. A lower credit score can mean higher rates and stricter terms, placing more roadblocks between you and home sweet home.\n\n::callout{title=\"How a higher credit score reduces interest\" body=\"Let’s say you’re taking out a 30-year fixed loan for $300,000. With a credit score of 680, you might land a 7.44% APR. But bump up that score to 700, and your rate could drop to 7.32%. That 0.12% reduction in interest would save you $24 each month and $8,467 over the life of your loan. Now, just think about what you could do with those extra dollars.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::\n\n### FICO score vs. credit score\n\nA credit score is the general term for the numbers that lenders use to help determine your creditworthiness. One of the most commonly used models is your FICO score, developed by the Fair Isaac Corporation.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"If you’re a Citi cardmember, you have free access to your FICO score—log in to check it out. If your bank doesn't partner with FICO, it’s worth checking to see if your credit card issuer does.\"}\n::",{"title":841,"content":842},"What is a good credit score to buy a home?","First, let’s go over the FICO score categories:\n\n300-579: Poor\\\n580-669: Fair\\\n670-739: Good\\\n740-799: Very Good\\\n800-850: Exceptional\n\n700 is a good spot to be in if you’re ready to go house hunting, and 740 is even better if you want to lock in the most competitive rates and save big on interest over time. See for yourself by plugging different interest rates into our Mortgage Calculator to explore how much you could save with a higher credit score. The minimum credit score to buy a house in 2025 still looks to be 500 if you’re using an FHA loan with a 10% down payment.",{"title":844,"content":845},"What credit score do you need for different types of loans?","Fortunately, you don’t need perfect credit to land a loan. Let’s check out several loan types and their typical credit requirements.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Mortage type\"},{\"value\":\"Minimum credit score\"},{\"value\":\"Purpose\"}]' :rows='[{\"column\":{\"valueOne\":\"Conventional loans \",\"valueTwo\":\"620\",\"valueThree\":\"For borrowers with good credit and stable income\"}},{\"column\":{\"valueOne\":\"FHA loans \",\"valueTwo\":\"500 (with 10% down payment)      580 (with 3.5% down payment)\",\"valueThree\":\"For first-time home buyers or people with lower credit and a smaller down payment\"}},{\"column\":{\"valueOne\":\"USDA loans\",\"valueTwo\":\"640 \",\"valueThree\":\"For rural home buyers in qualifying regions; requirements vary by lender\"}},{\"column\":{\"valueOne\":\"VA loans\",\"valueTwo\":\"620\",\"valueThree\":\"For service members, veterans and eligible surviving spouses looking for no down payment; requirements vary by lender\"}},{\"column\":{\"valueOne\":\"Jumbo loans\",\"valueTwo\":\"680\",\"valueThree\":\"For borrowers with strong credit buying in high-cost areas; requirements vary by lender\"}}]'}\n::",{"title":847,"content":848},"Can you get a mortgage with no credit history?","Lenders know that a credit score doesn’t always tell the whole story. If you’ve never had a credit card or taken out a loan, you may not have a traditional credit history—but you still have a financial track record. In these cases, manual underwriting may be an option. This process involves a real person (not just an algorithm) reviewing other proof of your financial responsibility, such as:\n\n* Rent\n* Utilities\n* Insurance premiums\n* Phone plans\n* Daycare/tuition\n* Entertainment services\n* Gym memberships\n* Pay-over-time plans\n\nOn top of non-traditional forms of credit history, you can boost your approval odds by making a large [down payment](/home-buying/articles/how-much-down-payment-for-a-house/) to mitigate the lender’s risk or by pursuing an [FHA loan](/home-loans/fha-loan/), which offers more lenient credit requirements.",{"title":850,"content":851},"How is your credit score calculated?","Three major credit bureaus report your credit score, using slightly different formulas: Equifax®, Experian® and TransUnion®. If you’re applying for a mortgage by yourself, a lender will use the median (or middle score) as your “official” credit score. If you’re [applying for a mortgage](/home-buying/articles/apply-for-a-mortgage) with two or more people, the lender will typically go by the lowest median score of all the applicants.\\\nIn some cases, the average median score of all borrowers will be used.\n\n::callout{title=\"Credit score evaluation in action\" body=\"Let’s say you and a co-borrower submit a mortgage application together. If your median credit score is 600 and theirs is 700, most lenders would use your 600 score as the deciding number. That means the applicant with the lowest credit score may have the biggest impact on the lender’s decision.\" image=\"\" :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":853,"content":854},"How to improve your credit score before buying a house","So, you’re ready for a house, but your credit score isn’t? Don’t sweat it—we’ve got actionable ways to get that number into better shape.\n\n### 1. Knock out existing debt\n\nLenders want to see that you can handle your current debt and have room to take on more. Chipping away at your existing debt not only feels good—it can have a positive impact on your credit. If you have big credit card bills or student loans, keep paying them down until they’re off your plate.\n\nThis helps your credit from two angles: your [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio) and your credit utilization ratio. Remember, the DTI ratio measures how well you manage debt. Your credit utilization ratio compares your spending to your credit limits. So, if you’re holding onto a high balance, lenders may assume you can’t handle any more debt.\n\n### 2. Make payments on time\n\nLenders love a reliable borrower. When you build up a history of paying your bills on time, you look trustworthy, which can result in your credit score increasing. This applies to many payments, like electricity and phone bills, so it’s a good idea to stay on top of every expense. \n\n### 3. Hold off on opening new lines of credit\n\nTo make a good impression, avoid applying for new credit accounts right before your mortgage application and during the approval process. If you do, your credit score could get dinged for hard inquiries on your credit report.",{"title":856,"content":857},"What else affects mortgage approval besides credit score?","Beyond your credit score, lenders factor in a few other indicators of creditworthiness: [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/), loan-to-value (LTV) ratio and income. If you want to find out how well you currently manage debt, take the [DTI Calculator](/calculators/) for a spin.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Factor lenders consider\"},{\"value\":\"Description\"},{\"value\":\"Requirements\"}]' :rows='[{\"column\":{\"valueOne\":\"Debt-to-income (DTI) ratio\",\"valueTwo\":\"The relationship between the debt you owe and the income you earn each month used to assess if you can manage another debt payment.\",\"valueThree\":\"A DTI lower than 50% improves your odds. The lower your DTI, the more income you have to spare for an additional mortgage payment.\"}},{\"column\":{\"valueOne\":\"Loan-to-value (LTV) ratio\",\"valueTwo\":\"The home’s appraised value vs. the amount you’re borrowing, calculated by dividing the loan amount by the home price, written as a percentage.\",\"valueThree\":\"Lenders typically look for an LTV ratio of 80% or lower, which is why a 20% down payment is often required. The more of your own money you invest upfront, the less risk the lender takes on. \"}},{\"column\":{\"valueOne\":\"Income\",\"valueTwo\":\"Salary can affect what type of loan you qualify for and the interest rate you’re offered.\",\"valueThree\":\"Lender requirements vary, but most will want proof of income via bank statements, paystubs and W-2s. FHA and USDA loans are ideal for lower credit borrowers. \"}}]'}\n::",{"title":859,"content":860},"Where to check and monitor your credit score for free","Keep tabs on your progress by monitoring your creditworthiness. You can review your past credit history (but not your score) for free each week via the government-authorized [AnnualCreditReport.com](http://AnnualCreditReport.com.). You can also track your credit score for free weekly through services like [Credit Karma](https://www.creditkarma.com/lp/free-credit-scores-v12a?gclsrc=aw.ds&gad_source=1&gad_campaignid=20266610103&gbraid=0AAAAADrT-VckmG2WWRqdeIWuQtsiDGNIh&gclid=CjwKCAjwz_bABhAGEiwAm-P8YbsDDL9J7Lgo6l1yerSEgO0vrq665wzqrjcd-nLOpGaSzkrPes4UfxoCP34QAvD_BwE), [Experian](https://usa.experian.com/mfe/credit/report/experian/now?op=XXXX-ALT-AC2-XXX-QAR-XXXXXXX-XX-EXP-VMAC-SEM-XXXXXX-XXXXXX-XXXXX&_gl=1*1n6y7el*_gcl_aw*R0NMLjE3NDY4MTg5MDYuQ2p3S0NBand6X2JBQmhBR0Vpd0FtLVA4WWFzZUpaY1pwVHBvS0tCMjVBdkFuRjF6SVBnOGpyNUtydDN6WVVWblJ4TGF1UjlfUXE5VWtob0NxWDhRQXZEX0J3RQ..*_gcl_au*MTI5Mjk3MTA5MC4xNzQ2ODE4OTAz*_ga*MTkwMzI2ODEwLjE3MjE5MzU3MzE.*_ga_7EN8BHB8L8*czE3NDY4MTg5MDMkbzckZzAkdDE3NDY4MTg5MDMkajYwJGwwJGgw*_ga_22YNWJN8Z2*czE3NDY4MTg5MDMkbzckZzAkdDE3NDY4MTg5MDMkajYwJGwwJGgw) or banks that offer [FICO](https://www.myfico.com/) score access.\n\n::disclaimer-dialog{:dialogCopy='\"## FICO® Terms & Conditions\\n\\nFICO and “The score lenders use” are registered trademarks of Fair Isaac Corporation in the United States and other countries. Your FICO® Score is provided for your own non-commercial personal review, use and benefit. Citi and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Citi and Fair Isaac do not provide ‘credit repair’ services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.\\n\\nYour FICO Score is calculated based on data from your Equifax credit report using the FICO Bankcard Score 8 model and may be different from other credit scores. FICO Score(s) are intended for and delivered only to the Primary cardmember and only if a FICO Score is available. Disclosure of this score is not available for all Citi products and Citi may discontinue displaying the score at our discretion.\\n\\nFICO and “The score lenders use” are registered trademarks of Fair Isaac Corporation in the United States and other countries. Your FICO Score is provided for your own non-commercial personal review, use and benefit. Citi and Fair Isaac are not credit repair organizations as defined under federal or state law, including the Credit Repair Organizations Act. Citi and Fair Isaac do not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history or credit rating.\"' buttonCopy=\"FICO Terms & Conditions\"}\n::","2025-07-16T12:00:00.000-05:00","When you’re ready to purchase a home, your credit score steps into the spotlight. This three-digit number is a key player in your mortgage approval—it helps lenders decide how much they trust you and what kind of loan terms you'll get. The higher your score, the better your chances of getting approved and receiving a favorable interest rate. Knowing what kind of credit score you need for different loan types can help you break into homeownership without breaking the bank.","What credit score do you need to buy a house?",[865,866,758],"first-time-buyer","credit-score",{"introText":868,"text":658,"to":725,"body":869},"Ready to buy a home?   ","Let Citi help you decide on the right loan options for you. ",{"title":871,"description":872},"What Credit Score Do You Need To Buy a House?","Find out the credit score needed to buy a house. Learn what score is required for a mortgage, how it impacts your loan, and tips for improving your credit.","content:articles:home-buying:what-credit-score-do-you-need-to-buy-a-house.json","What Credit Score Do You Need To Buy A House","articles/home-buying/what-credit-score-do-you-need-to-buy-a-house.json",[769,877,881],{"label":878,"slug":865,"seo":879},"First Time Buyer",{"description":880},"Learn more about first time buyer with helpful articles, tools, and guides to support your homeownership journey.",{"label":882,"slug":866,"seo":883},"Credit Score",{"description":884},"Understand how your credit score impacts your ability to qualify for a home loan and how to improve it.",{"_path":886,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":779,"l1":654,"linkNav":887,"heroMedia":888,"teaserImage":891,"outro":7,"slug":893,"sections":894,"date":904,"subheadline":905,"headline":906,"isFeatured":6,"tags":907,"link":908,"seo":911,"hasSectionNavigation":27,"_id":914,"_type":78,"title":915,"_source":80,"_file":916,"_extension":78,"tagsDetails":917},"/articles/home-buying/second-home",{"introText":657,"text":658,"to":725},{"landscape":889,"portrait":890},"/media/article-how-to-buy-a-second-home_-mobile-768x512.jpg","/media/article-how-to-buy-a-second-home_-desktop-520x638.jpg",{"src":892},"/media/article-how-to-buy-a-second-home_-teaser-500x500.jpg","second-home",[895,898,901],{"title":896,"content":897},"Reasons to buy a second home","Each type of property not only serves a different purpose but also comes with distinct financing options, tax implications and insurance requirements. Today, we’re talking about buying a second home, so let’s dive into the details! There are plenty of reasons people buy second homes. Perhaps rentals are sparse in your favorite vacation spot. Or, maybe it’s a fixer-upper to sell down the line. Whatever’s driving your interest, here are some common reasons people opt for purchasing a second house.\n\n### A private vacation sanctuary\n\nSay “ahhh.” A second residence can become your own personal retreat—a place to relax and recharge with family and friends (or solo if that’s your jam). Whether it’s in the mountains, lakeside or along the coastline, buying a second home can be your escape from weekday stresses or just a welcome change of scenery in your favorite second city. \n\n### Long-term wealth creation\n\nLooking to build some generational wealth? All in all, real estate is considered a pretty stable long-term investment which is why buying a second home can be a valuable addition to your investment portfolio.\n\n### An equity enhancement\n\nInvesting in a second home is a nice way to build equity. Each mortgage payment you make increases your ownership stake while improvements and maintenance enhance the property's value. This increase in value builds up your equity, which in turn builds your overall wealth.\n\n### Tax breaks\n\nWho doesn't love a good tax break? Chat with your tax advisor to determine whether there are tax benefits for your unique situation.",{"title":899,"content":900},"How to buy a second home","If you‘re an experienced homeowner, you’ve probably gleaned plenty of tips for buying a home the first time around, but buying a second home comes with its own set of nice-to-know tips and tricks.\n\n### Determine the purpose of the property\n\nThe purpose of the property will influence the [types of home loan programs](/home-loans) you're eligible for and the terms you might receive. Here’s how different purposes can affect your loan options:\n\n* **Vacation home**: If you're buying a second home primarily for personal use as a vacation spot, you can typically apply for a conventional mortgage similar to your primary residence mortgage. Lenders will look for a good credit score, a stable income and a reasonable debt-to-income ratio. Keep in mind that the terms for a second home might be different from those for your [primary residence](/home-buying/articles/primary-residence). It's a good idea to have a conversation with your lender to clearly understand these differences.\n* **Investment property**: When you're looking to buy a home that you plan to use as a rental or investment property, the loan requirements might be a bit different. Since you won't be living in the property yourself, lenders often view these situations as higher risk. As a result, they might ask for different terms to offset this risk. This could include a higher down payment, or a different [interest rate](/rates) compared to what you might get for a property where you plan to live.\n* **Mixed-use properties**: If the property is mixed-use, meaning part of it is residential and part is commercial, you might need a specialized loan that can handle both aspects. These loans can be more complex and might come with different terms and eligibility requirements.\n\n### Consider all the costs of buying a second home\n\n* **[Down payment](/home-buying/articles/how-much-down-payment-for-a-house)**: The down payment amount for a second home may differ from a primary residence, so remember to specify the use of the property when you chat with your mortgage lender, and they’ll be able to explain these differences to you.\n* **Tax implications**: Speak to your tax or financial advisor whether owning a second home can offer any potential tax benefits.  \n* **Insurance and maintenance**: These costs can be higher for a second home, especially if it’s located in a high-risk area, like a flood zone or if it's vacant for parts of the year.\n\n### Decide how you’ll finance your second home\n\nFinancing a second home can involve some strategies that are less commonly used for purchasing a primary residence. Here are a few unique methods to consider when buying a second house:\n\n* **[Home equity line of credit](/home-loans/heloc)**: If you have significant equity in your primary residence, you can take out a home equity line of credit (HELOC) to finance the purchase of a second home. This can be a convenient option because it potentially offers lower interest rates. \n* **[Cash-out refinance](/refinancing/articles/cash-out)**: This involves refinancing your primary home for a higher amount than you owe and using the extra cash to purchase your second home. This can be a good strategy if you can secure a lower interest rate on your primary mortgage in the process.\n* **401(k) loans**: Some 401(k) plans allow you to borrow against your retirement savings to buy a second home, but always remember to consult your tax or financial advisor before you consider this as an option.\n* **IRA withdrawals**: Your financial advisor can also guide you through the process of potentially using money from an IRA to help buy a second home. They can explain how making an early withdrawal might work and discuss whether it's a viable option for you.\n* **Seller financing**: In some cases, the seller of the second home may be willing to finance the purchase for you. This can often bypass traditional lending requirements and may offer more flexible terms. This is more common in situations where the seller is having difficulty selling the property.\n\nEach of these options comes with its own set of risks and benefits and it’s important to carefully consider your financial situation and long-term goals before deciding on a financing method.",{"title":902,"content":903},"How do I qualify for a second-home mortgage?","Lenders do have specific criteria they look at when qualifying someone for a second-home mortgage, which can differ from the criteria used for a first home. Here are some considerations:\n\n* **[Credit score requirements](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house)**: A higher credit score might be necessary to qualify for a second home which is a reflection of the increased risk associated with a non-primary residence.\n* **[Debt-to-income ratio (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio)**: Your DTI may need to be lower to qualify for a second-home mortgage. Lenders will carefully evaluate your existing debts and your income to ensure you can handle additional mortgage payments. This ratio is important in determining your ability to finance another home.\n* **Cash reserves**: Otherwise known as mortgage reserves, lenders might require you to have more available cash to buy a second home. This means you may need to show that you have enough available assets to cover mortgage payments for several months on both your primary and second home, in case of lost income or other financial setbacks.\n* **Proof of income**: Demonstrating stable and sufficient income is even more critical when applying for a second-home mortgage. You may need to provide additional documentation or proof of additional income sources.","2024-10-01T14:53:00.000Z","When considering the purchase of a second home, it's important to understand the difference between a second home and an investment property. A second home is used as a personal retreat—like a beach house or a mountain cabin where you can escape the hustle and bustle. In contrast, an investment property is rented to others to generate income.","What to know about buying a second home",[654,758],{"introText":909,"text":658,"to":725,"body":910},"Still have questions?","Talking to a mortgage pro can be a game-changer when it comes to figuring out the best way to finance a second home. ",{"title":912,"keywords":7,"description":913},"How to Buy A Second Home","Thinking of buying a second home? Get expert tips and step-by-step guidance on purchasing a second property, from financing to finding the perfect getaway.","content:articles:home-buying:second-home.json","Second Home","articles/home-buying/second-home.json",[769,773],{"_path":919,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":920,"l1":654,"linkNav":921,"heroMedia":922,"teaserImage":925,"slug":927,"sections":928,"date":953,"subheadline":954,"headline":955,"dateModified":956,"isFeatured":6,"tags":957,"link":959,"seo":962,"hasSectionNavigation":27,"_id":965,"_type":78,"title":966,"_source":80,"_file":967,"_extension":78,"tagsDetails":968},"/articles/home-buying/apr-vs-interest-rate",8,{"introText":657,"text":658,"to":725},{"landscape":923,"portrait":924},"/media/article-apr-vs.-interest-rate-mobile-768x512.jpg","/media/article-apr-vs.-interest-rate-desktop-520x638.jpg",{"src":926},"/media/article-apr-vs.-interest-rate-teaser-500x500.jpg","apr-vs-interest-rate",[929,932,935,938,941,944,947,950],{"title":930,"content":931},"Is APR the same  as the  interest rate? ","A  mortgage’s  interest rate  and APR are both super important for getting a clear picture of the  total  cost of a loan, but they  represent  different  aspects. Your mortgage interest rate is the percentage of the loan amount you pay to borrow, but your APR is a more holistic view of the full annual cost of borrowing. It includes the interest rate plus any extra fees. Here’s a quick chart to help you understand what each term really means and how  it affects your loan: \n\n::inline-table{tableLayout=\"basic\" :rows='[{\"column\":{\"valueOne\":\"Definition\",\"valueTwo\":\"The cost the bank or lender charges to borrow money, expressed as a percentage. \",\"valueThree\":\"A representation of the full cost of borrowing, also expressed as a percentage.\"}},{\"column\":{\"valueOne\":\"Includes\",\"valueTwo\":\"Only the interest charges on the loan.\",\"valueThree\":\"Interest charges plus other costs associated with the loan, such as lender fees, certain closing costs and mortgage points.\"}},{\"column\":{\"valueOne\":\"Purpose\",\"valueTwo\":\"To determine the cost of borrowing the principal loan amount.\",\"valueThree\":\"To give you a more comprehensive view of the cost of the loan.\"}},{\"column\":{\"valueOne\":\"Use\",\"valueTwo\":\"Understand how much you’ll pay in interest\",\"valueThree\":\"Compare the total costs of loans, including fees and other loan-related charges from 2 or more lenders.\"}}]' :headers='[{\"value\":\"\"},{\"value\":\"Interest Rate\"},{\"value\":\"APR (Annual Percentage Rate)\"}]'}\n::",{"title":933,"content":934},"What is an interest rate?","Simply put, an interest rate is the cost you pay to borrow money, expressed as a percentage. You might see interest rates advertised by banks and lending groups as the headline figure for loans and mortgages.\n\n### Interest rates in action\n\n**Scenario**: You take out a $300,000 mortgage with an interest rate of 6% per year to be paid over 30 years. The interest rate is fixed and will not change over the 30-year term of the loan.\n\n::card{eyebrowIcon=\"\" body=\"Get the latest scoop on today’s rate trends.  \" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" headline=\"Curious about what current Citi rates are?\" backgroundColor=\"\" icon=\"Homecheck\" link=\"/rates\" ctaText=\"Learn More\"}\n::\n\n**Monthly payments**: Using a [mortgage calculator](/calculators/monthly/), we can determine that your monthly payment would be approximately $1,799.\n\n**How payments are split**: Every month, your payment is divided into principal (the cost of the mortgage) and interest (the fee you pay for borrowing). The interest for the first month is calculated as 6% of $300,000, divided by 12 months, which equals about $1,500. So, of your $1,799 payment, $1,500 goes toward interest, and the remaining $299 reduces your principal.\n\n**Subsequent payments**: In the second month, your new principal is $299,701 ($300,000 - $299). The interest for this month is calculated on the new principal, which would be slightly less than the first month's interest. Therefore, a slightly larger portion of your second payment goes toward reducing the principal. \n\n**Long-term impact**: This process continues each month, gradually decreasing the interest portion and increasing the principal portion of your payment until the loan is paid off. This is often referred to as an [amortization schedule](/calculators/amortization/).",{"title":936,"content":937},"What is an annual percentage rate (APR)?","The annual percentage rate is a measure of the cost of credit, expressed as a yearly rate. It goes a step further than the interest rate by including costs of a home loan, such as mortgage insurance, discount points, loan origination fees and other loan-related charges. The APR is also expressed as a percentage and provides a more comprehensive look at the cost of a loan.",{"title":939,"content":940},"Understanding the difference between interest rate and APR","When you’re looking at loans, a low interest rate might seem like the best deal. But let’s take a closer look—there's more to the story when it comes to APR.  \n\nImagine you have two loan options:  \n\n* Loan A has a lower interest rate but comes with higher fees\n* Loan B has a higher interest rate but lower fees  \n\nAt first glance, Loan A may appear more appealing due to its lower interest rate. However, because it has higher fees, it may have a higher APR. That might mean Loan B is actually the better deal in the long run. The APR provides a more comprehensive view by showing the total yearly cost of the loan, not just the interest rate.\n\nCiti makes it easy to review current [mortgage rates](/rates/) and understand how fees factor into the total cost of borrowing.",{"title":942,"content":943},"What determines the interest rate?","Interest rates are always on the move, so it's normal to see them go up and down while shopping around. There are several key factors that go into the specific rate you may be offered.\n\n1. **[Credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/):** Sporting strong credit can unlock lower interest rates, signaling to lenders that you’re a safe bet for timely repayments.\n2. **Loan amount and loan term:** Usually the interest rate for a loan will differ depending on the loan size and the loan term, meaning how long the loan is expected to take to pay off.\n3. **Current market conditions:** Inflation and economic growth play a major role in setting interest rates and affect whether they trend up or down. The rate set by the Federal Reserve, commonly known as the fed funds rate, reflects current market conditions. Changes in the fed funds rate influence the prime rate, or the interest rate lenders charge their most creditworthy borrowers. The prime rate can affect the cost of consumer products including mortgages.\n4. **Fixed vs. variable rates:** Interest rates come in two flavors: fixed and variable. While the rate of a [fixed rate mortgage](/home-loans/fixed-rate/) does not change during the term of the loan, the rate of a variable-rate loan, or an [adjustable-rate mortgage](/home-loans/adjustable-rate/), can change over time. To prevent these rates from changing too drastically, variable-rate loans have caps that limit how much the interest rate can increase or decrease, or a period where the rate stays fixed before it starts to vary, giving you some initial stability.  \n\nOther elements, such as the type of loan, your location, the type of property, the purpose of the loan and the loan-to-value ratio may also play critical roles in setting your interest rate.",{"title":945,"content":946},"How is APR calculated?","The APR is calculated by combining the interest rate with other costs, such as loan related [closing costs](/home-buying/articles/closing-costs) or [private mortgage insurance](/home-buying/articles/pmi-home-loan). These total costs are expressed as a yearly rate. The Truth in Lending Act requires lenders to disclose the APR, ensuring transparency so you can make an informed decision when comparing similar [loan programs](/home-loans).",{"title":948,"content":949},"How do I get a lower interest rate?","Typically, home buyers are on the hunt for the lowest interest rate they can find to make their monthly payments more affordable. There are a few ways you can increase your chances of locking in a lower rate.\n\n### Raise your credit score\n\nBoosting your credit is arguably the most direct way to influence the interest rates available to you. Making your payments on time, lowering your credit utilization ratio and limiting the number of hard credit checks on your report may help raise your score.\n\n### Get a government-backed loan\n\nBorrowers with lower credit scores or a lower down payment may find that [government-backed loans](/home-buying/articles/government-backed-home-loans/), like [FHA](/home-loans/fha-loan/) or [VA loans](/home-loans/va-loan/), have lower interest rates available compared to [conventional loans](/home-loans/conventional-loan/). These loans are insured by government agencies, meaning the lenders can offer lower rates because they’re taking on less risk.\n\n### Buy down the rate\n\nThe interest rate can be lowered by paying discount points. [Mortgage points](/rates/articles/what-are-mortgage-points) are a fee, that lowers the interest rate. One point typically costs 1% of the total loan amount and generally lowers the interest rate by 0.25%. The lower rate applies to the life of your fixed-rate loan.\n\n### Increase your down payment\n\nUpping your down payment can help lower your loan-to-value (LTV) ratio. That’s a fancy way of saying the percentage of your home's value that's covered by your loan. A lower LTV may help you snag a lower interest rate. So, making a larger upfront payment can pay off with smaller interest payments down the line.\n\n### Leverage relationship pricing programs\n\nSome lenders, like Citi, offer special pricing programs for existing customers. For example, Citi's [Mortgage Relationship Pricing](https://www.citi.com/mortgage/relationship-benefits) program offers closing cost discounts or a discount on the interest rate for new and existing Citi banking customers based on their Citi Eligible Balances. \n\n::content-table{headline=\"Citi Mortgage discount Relationship Pricing \" :tableData='[{\"row\":[{\"column\":\"Account balance \"},{\"column\":\"Closing credit or interest rate discount \"}]},{\"row\":[{\"column\":\"$1 - $49,999.99 \"},{\"column\":\"$500 off closing costs \"}]},{\"row\":[{\"column\":\"$50,000 - $199,999.99 \"},{\"column\":\"0.125% or 1/8% off interest rate\"}]},{\"row\":[{\"column\":\"$200,000 - $499,999.99 \"},{\"column\":\"0.125% or 1/8% off interest rate and $1,500 off Closing Costs\"}]},{\"row\":[{\"column\":\"$500,000 - $999,999.99 \"},{\"column\":\"0.25% or 1/4% off interest rate\"}]},{\"row\":[{\"column\":\"$1,000,000 - $1,999,999.99 \"},{\"column\":\"0.375% or 3/8% off interest rate\"}]},{\"row\":[{\"column\":\"$2,000,000 or more \"},{\"column\":\"0.5% or 1/2% off interest rate\"}]}]'}\n::\n\n[Important Terms & Conditions](https://www.citi.com/mortgage/relationship-benefits#importantDisclosures)",{"title":951,"content":952},"The final walkthrough: interest rate vs. APR","Getting a handle on the difference between APR and interest rate can be a game-changer when finding a great deal on your dream home. While the interest rate shows the basic cost of borrowing, the APR gives you a clearer picture of the total cost each year.  \n\nUnderstanding this distinction helps to ensure that you’re not just snagging a low rate, but also getting the most favorable overall terms for your mortgage.","2024-09-30T16:08:00.000Z","**Key insights:**  \n\n* APR and interest rate measure different costs of a mortgage: The interest rate reflects only the cost of borrowing  the principal, while APR (annual percentage rate) captures the full cost of the loan by including fees, points and certain closing costs \n* Compare specifics of loan offers, because a loan with a lower interest rate can still be more expensive overall if it comes with higher fees  \n* Borrowers may influence their interest rate by improving credit score, increasing the down payment, choosing government-backed loans or paying discount points to reduce the rate over time\n\nIf you’ve ever mixed up  your APR (annual percentage rate) and interest rate, you’re not alone. You may encounter these terms across multiple financial products, including mortgages. Let’s get into how APR and interest rate stack up against one another and how you can use them to measure the costs of buying a home.","Annual percentage rate vs. interest rate","2026-03-31T09:43:00.000Z",[958,701],"rates",{"introText":960,"text":658,"to":725,"body":961},"Want to learn more about rates?","Let's chat through it together.",{"title":963,"description":964},"Annual Percentage Rate vs. Interest Rate | Mortgage.com","Learn the difference between interest rate vs APR, and how understanding your total mortgage cost can help you buy your dream home.","content:articles:home-buying:apr-vs-interest-rate.json","Apr Vs Interest Rate","articles/home-buying/apr-vs-interest-rate.json",[717,969],{"label":13,"slug":958,"seo":970},{"description":971},"Stay informed about rates. Explore market trends, rate factors, and tips to lock the best mortgage rate.",{"_path":973,"_dir":654,"_draft":6,"_partial":6,"_locale":7,"readTime":779,"l1":654,"linkNav":974,"heroMedia":975,"teaserImage":978,"author":7,"outro":7,"slug":980,"sections":981,"date":1001,"subheadline":1002,"headline":1003,"isFeatured":6,"tags":1004,"link":1007,"seo":1010,"hasSectionNavigation":27,"_id":1013,"_type":78,"title":1014,"_source":80,"_file":1015,"_extension":78,"tagsDetails":1016},"/articles/home-buying/government-backed-home-loans",{"introText":657,"text":658,"to":725},{"landscape":976,"portrait":977},"/media/article-government-backed-home-loans-mobile-768x512.jpg","/media/article-government-backed-home-loans-desktop-520x638.jpg",{"src":979},"/media/article-government-backed-home-loans-teaser-500x500.jpg","government-backed-home-loans",[982,983,986,989,992,995,998],{"hideTitle":27,"title":668,"content":836},{"title":984,"content":985},"Learning about government-backed home loans","So, you’re ready to [buy your first house](/home-buying/articles/first-time-home-buyer) and want to know more about your options. Government-backed loans can be a good place to start.\n\n### What are government-backed home loans?\n\nGovernment-backed loans are all about making that dream of homeownership more achievable—and affordable. They’re backed by federal agencies, which can help make lenders more likely to take a chance on you. That’s great news if your credit score isn’t high enough or you if you haven’t had a chance to save a bunch of cash for a big [down payment](/home-buying/articles/how-much-down-payment-for-a-house).\n\n::quote{icon=\"Mortgage\" quote=\"Government-backed loans are all about making that dream of homeownership more achievable—and affordable. They’re backed by federal agencies, which can help make lenders more likely to take a chance on you.\"}\n::\n\n### Benefits of government home loans for first-time buyers\n\nGovernment-backed loans for first timers come with some nice benefits, setting them apart from [conventional loans](/home-buying/articles/va-loans-vs-conventional-loans-whats-the-difference) issued by financial institutions. These pluses include more flexible requirements for down payment, credit score and debt-to-income ratio. The specifics depend on the type of loan you’re talking about, so let’s dive in.",{"title":987,"content":988},"Types of government-backed home loans","There are three main types of government-backed loans: FHA loans, VA loans and USDA loans. They’re all here to make homeownership a little easier, especially if you’re buying your first home.\n\n::cta-card-grid{headline=\"\" :cards='[{\"ctaType\":\"arrow\",\"headline\":\"FHA loans\",\"body\":\"Backed by the Federal Housing Administration (FHA), these loans are an option for homeowners with lower credit scores. You can often get by with a score as low as 580 and a down payment as low as 3.5%. Just note, the lower the score, the higher the down payment requirement. That flexibility can help you land the starter home you’re looking for. \",\"link\":\"/home-loans/fha-loan\"},{\"ctaType\":\"arrow\",\"body\":\"If you’re a veteran, active service member or a surviving spouse, you’ll want to look into VA loans. Backed by the Department of Veterans Affairs (VA), these loans offer competitive interest rates, flexible credit score requirements and no down payment with a 100%  VA loan guarantee benefit. VA loans also don’t require private mortgage insurance (PMI).\",\"headline\":\"VA loans\",\"link\":\"/home-loans/va-loan\"},{\"ctaType\":\"arrow\",\"headline\":\"USDA home loans\",\"body\":\"Dreaming of a home in the countryside? Insured by the United States Department of Agriculture (USDA), these loans are designed for people on a budget looking to buy in an eligible rural area. And just like FHA loans, they have more flexible credit score and down payment requirements.\",\"link\":\"/home-loans/usda-loan\"}]' body=\"\"}\n::",{"title":990,"content":991},"Applying for government-backed home loans","There are a few hoops you’ll have to jump through to get the process rolling. Let’s break it down.\n\n### How to apply for an FHA loan?\n\nIf you think an FHA loan is right for you, the first step is checking that you meet all the basic requirements. If you check the boxes, the next step is to find an FHA-approved lender and work with them to get that “[preapproved](/home-loans/articles/how-to-get-pre-approved)” green light until it’s time to fill out an official loan application.\n\n### How to apply for a VA loan?\n\nWith a VA loan, you’ll need to meet specific service requirements and show that you qualify by getting a Certificate of Eligibility (COE) from the VA. So, your very first step is to request a COE from the Department of Veterans Affairs or a VA-approved lender. Once that’s squared away, you can move on to getting preapproved for your loan.\n\n### How to apply for a USDA loan?\n\nFirst, make sure you meet the income and property requirements. Remember, a USDA loan is an option only if you’re looking to buy in an eligible rural area. Next step, find an approved lender, apply for preapproval (this is where the lender will check your income and the property’s USDA eligibility) and submit that application.",{"title":993,"content":994},"Tips for first-time home buyers","Buying a home—especially that very first one—can feel overwhelming. By keeping these three key points in mind, you can help your search go smoothly.\n\n**Be realistic about your budget**. It’s always fun to dream big, but it’s important to crunch the numbers and figure out what you can afford. Remember to factor in things like [closing costs](/home-buying/articles/closing-costs) along with your monthly mortgage payments.\n\n**Get preapproved for a mortgage**. [Preapproval](/home-loans/articles/how-to-get-pre-approved) can be your golden ticket to finding your dream home. You’ll get a better handle on how much you can borrow and a leg up on the competition when it comes time to make an offer.\n\n**Do your research**. [Home buyer programs](/home-buying/articles/first-time-home-buyer) can vary by state and by lender, so make sure you explore all the options available to you.\n\n**Look into down payment assistance**. Because you’re a first-time home buyer, you may be eligible for down payment assistance through your local or state housing authority, a nonprofit organization or the U.S. Department of Housing and Urban Development.",{"title":996,"content":997},"First-time home buyer programs","Wondering what else is out there for [first-time home buyers](/home-buying/articles/first-time-home-buyer)? Beyond government home loans for first-time buyers, there are different programs you can tap into to make your dream of a new place a reality.\n\n* **[Freddie Mac and Fannie Mae programs](/home-loans/home-ready-home-possible)**: Fannie Mae's HomeReady and Freddie Mac's Home Possible programs offer a pathway to homeownership with just 3% down payment, even for borrowers with less-than-ideal credit. Both require that applicants earn no more than 80% of the local median income, and both programs allow the use of gifts or grants to cover the down payment. How are these two options different? HomeReady requires a minimum credit score of 620, while Home Possible requires a minimum score of 660.\n* **State programs for first-time home buyers**: These programs vary based on what state you call home, but they can help with your down payment, closing costs, tax credits and more.\n* **Fixer-upper mortgages, a.k.a. renovation loans**: These loans allow buyers to purchase a home and roll the remodeling costs into their [mortgage](/home-buying/articles/apply-for-a-mortgage) with one convenient monthly payment.\n* [**Citi HomeRun**® **Mortgage**](/home-loans/home-run): This option can be perfect for first timers, even if you don’t have the best credit score. You can put down as little as 3%, you won’t have to pay for mortgage insurance and you’ll get a fixed interest rate so it’s easier to budget for monthly payments.This programs is only available in select markets and may have income limitations. \n\n::disclaimer-dialog{buttonCopy=\"HomeRun Terms & Conditions\" :dialogCopy='\"## HomeRun Terms & Conditions\\n\\nHomeRun is available in Citibank assessment areas and specific census tracts in Arlington, VA, Atlanta, GA, Austin, TX, Cambridge, MA, Dallas, TX, Denver, CO, Frederick, MD, Houston, TX, Marietta, GA, Newark, NJ, New York, NY, Philadelphia, PA, San Jose, CA and Washington, D.C. Metropolitan Statistical Areas for loans on the primary residence of borrowers who qualify, and is also subject to income, property, product and other restrictions. To be eligible for up to 97% financing, the property must be a single-family home (including condos, co-ops and planned unit development) with a loan amount up to $806,500. Certain condo and co-op projects may be subject to lower LTVs. Single-family homes in certain high-cost markets with loan amounts between $806,501 and $1,209,750 are eligible for up to 95% financing. Non-traditional credit on conforming loan sizes requires 5% down payment. Non-traditional credit is not permitted on loans exceeding conforming loan limits. Two-unit properties are eligible for 89.99% financing with loan amounts up to $1,032,650, or 85% up to $1,548,975 in certain high-cost markets. In addition to home buying education, borrowers of two-unit properties must participate in landlord training from a Citi-approved community agency prior to closing. HomeRun is not available on cash-out refinance transactions.\"'}\n::",{"title":999,"hideTitle":27,"content":1000},"Government-backed home loans FAQs","::faq{headline=\"Government-backed home loans FAQs\" :faqs='[{\"question\":\"What are the advantages of government-backed loans for first-time home buyers?\",\"answer\":\"Government-backed loans have the advantage of being guaranteed by the government, which ensures the lender will be compensated if the borrower defaults on the loan. For buyers, this backing translates to lower down payment requirements, friendlier credit rules and the possibility of better interest rates.\"},{\"question\":\"How do I choose the right loan?\",\"answer\":\"There’s no one-size-fits-all loan. Your credit score, how much money you make and the amount you’re hoping to borrow will all determine the best choice for you.\"},{\"question\":\"Can I combine different programs?\",\"answer\":\"It depends. Make sure you look up the rules for your state’s first-time home buyer programs and always check to see what your lender says.\"}]'}\n::","2024-09-10T11:48:00.000Z","If you’re a first-time home buyer worried about your credit score or pulling together the cash for a down payment, there's good news ahead. Government-backed home loans, like FHA loans, are designed to help even the playing field and turn your dream of owning a home into a reality. Let's dive in and explore how these loans can work for you.","A guide to government-backed home loans",[1005,1006,701],"specialty-loans","fha-loans",{"introText":1008,"text":658,"to":725,"body":1009},"Ready to make your first move? ","We’re here to help you decide which loan is best for you.  ",{"title":1011,"description":1012},"Guide to Government Backed Home Loans | Citi Mortgage","Explore government-backed home loans for first-time buyers. Learn about FHA, USDA, and VA loans, and find the best option for your home purchase.","content:articles:home-buying:government-backed-home-loans.json","Government Backed Home Loans","articles/home-buying/government-backed-home-loans.json",[1017,717,1021],{"label":1018,"slug":1006,"seo":1019},"FHA Loans",{"description":1020},"Explore resources about fha loans—including types, requirements, and how to choose the right mortgage option.",{"label":1022,"slug":1005,"seo":1023},"Specialty Loans",{"description":1024},"Explore resources about specialty loans—including types, requirements, and how to choose the right mortgage option.",1776443509268]