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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":156},{"title":7,"description":102},"Key insights:",{"type":104,"children":105},"root",[106,117,137,151],{"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},"One common guideline, the 28% rule, suggests spending no more than 28% of your pre-tax income on housing",{"type":107,"tag":122,"props":128,"children":129},{},[130],{"type":116,"value":131},"Lenders may want all your monthly debts, including your mortgage payment, to fall below 36% of your gross income",{"type":107,"tag":122,"props":133,"children":134},{},[135],{"type":116,"value":136},"The right percentage of income for your mortgage depends on your personal financial situation",{"type":107,"tag":108,"props":138,"children":139},{},[140,142,149],{"type":116,"value":141},"Buying a home is a big milestone. For many people, it’s also one of the largest financial commitments they’ll ever make. If you’re wondering, “How much of my monthly income should go toward a ",{"type":107,"tag":143,"props":144,"children":146},"a",{"href":145},"/home-loans/articles/what-is-a-mortgage/",[147],{"type":116,"value":148},"mortgage",{"type":116,"value":150}," payment?” you’re asking the same question many buyers do at the very beginning of the process. You want a number that feels realistic, fits your income, leaves room for other priorities and doesn’t stretch your budget too thin.",{"type":107,"tag":108,"props":152,"children":153},{},[154],{"type":116,"value":155},"There isn’t a single “right” percentage that works for everyone. Your comfort level depends on your income, existing debts, lifestyle and long-term financial goals. But there are well-established guidelines that can help you think through affordability to find a monthly payment amount you’re comfortable with.",{"title":7,"searchDepth":157,"depth":157,"links":158},2,[],{"data":160,"body":162,"excerpt":-1,"toc":173},{"title":7,"description":161},"One of the most widely used affordability guidelines is known as the 28% rule. The idea is that your total monthly housing costs add up to no more than about 28% of your income before taxes. This includes your mortgage payment, property taxes and homeowners insurance. If your home has a homeowners association, those fees may also be part of the total.",{"type":104,"children":163},[164,168],{"type":107,"tag":108,"props":165,"children":166},{},[167],{"type":116,"value":161},{"type":107,"tag":108,"props":169,"children":170},{},[171],{"type":116,"value":172},"28% isn’t a strict rule or a hard limit, though. It’s a helpful guideline that gives you a sense of what may feel manageable. Many buyers find that staying around this range makes it easier to cover everyday expenses, keep saving and handle unexpected home costs without feeling stretched.",{"title":7,"searchDepth":157,"depth":157,"links":174},[],{"data":176,"body":178,"excerpt":-1,"toc":208},{"title":7,"description":177},"The 28% rule looks only at your housing costs, but lenders also want to understand how your full monthly budget comes together. To do that, they look at something called your debt-to-income ratio, often shortened to DTI. ",{"type":104,"children":179},[180,193,198,203],{"type":107,"tag":108,"props":181,"children":182},{},[183,185,191],{"type":116,"value":184},"The 28% rule looks only at your housing costs, but lenders also want to understand how your full monthly budget comes together. To do that, they look at something called your ",{"type":107,"tag":143,"props":186,"children":188},{"href":187},"/home-buying/articles/what-is-a-good-debt-to-income-ratio/",[189],{"type":116,"value":190},"debt-to-income ratio",{"type":116,"value":192},", often shortened to DTI. ",{"type":107,"tag":108,"props":194,"children":195},{},[196],{"type":116,"value":197}," In simple terms, this means adding up all the regular debt payments you make each month, not just your mortgage. That can include things like car payments, student loans, credit card minimums and personal loans. ",{"type":107,"tag":108,"props":199,"children":200},{},[201],{"type":116,"value":202}," Lenders look at how your monthly debt payments compare to your income before taxes. 36% is a common benchmark, but some lenders consider slightly higher DTIs—up to around 43%—under certain circumstances.",{"type":107,"tag":108,"props":204,"children":205},{},[206],{"type":116,"value":207}," Even if your housing payment feels manageable on its own, having a lot of other monthly debt can limit how much you’re approved to borrow. That’s why lenders look at the whole picture, not just your estimated mortgage payment.",{"title":7,"searchDepth":157,"depth":157,"links":209},[],{"data":211,"body":213,"excerpt":-1,"toc":235},{"title":7,"description":212},"When you apply for a mortgage, lenders look at your full financial picture rather than\nfocusing on a single percentage. This helps them understand what you\ncan reasonably manage month to month.",{"type":104,"children":214},[215,219,224,230],{"type":107,"tag":108,"props":216,"children":217},{},[218],{"type":116,"value":212},{"type":107,"tag":108,"props":220,"children":221},{},[222],{"type":116,"value":223},"They’ll usually consider things like: ",{"type":107,"tag":225,"props":226,"children":229},"inline-table",{":rows":227,"table-layout":228},"[{\"column\":{\"valueOne\":\"Income consistency\",\"valueTwo\":\"How steady your income has been over time and how predictable it looks going forward \"}},{\"column\":{\"valueOne\":\"[Credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) and history\",\"valueTwo\":\"How you’ve handled borrowing and payments in the past shows how you manage financial commitments\"}},{\"column\":{\"valueOne\":\"[Down payment](/home-buying/articles/how-much-down-payment-for-a-house/) amount\",\"valueTwo\":\"How much you’re able to put down upfront, which can affect both your loan structure and your monthly payment \"}},{\"column\":{\"valueOne\":\"Existing debt\",\"valueTwo\":\"Other regular payments you already have, such as car loans, student loans or credit cards\"}},{\"column\":{\"valueOne\":\"[Loan type](/home-loans/)\",\"valueTwo\":\"How your mortgage is structured, which can influence the monthly payment\"}},{\"column\":{\"valueOne\":\"[Property taxes](/home-buying/articles/are-property-taxes-included-in-mortgage-payment/) and [insurance](/home-buying/articles/what-is-homeowners-insurance/)\",\"valueTwo\":\"Costs that vary by location but play a meaningful role in your overall monthly housing expense\"}}]","basic",[],{"type":107,"tag":108,"props":231,"children":232},{},[233],{"type":116,"value":234},"Just because a lender says you can afford a certain amount, though, doesn’t mean it’s the right fit for you. Many buyers choose a smaller monthly payment so their budget still has room for savings, everyday expenses and life’s surprises.",{"title":7,"searchDepth":157,"depth":157,"links":236},[],{"data":238,"body":240,"excerpt":-1,"toc":330},{"title":7,"description":239},"If you’d like a simple way to estimate a monthly mortgage payment using common guidelines, you can walk through these steps: ",{"type":104,"children":241},[242,246,290,301],{"type":107,"tag":108,"props":243,"children":244},{},[245],{"type":116,"value":239},{"type":107,"tag":247,"props":248,"children":249},"ol",{},[250,260,270,280],{"type":107,"tag":122,"props":251,"children":252},{},[253,258],{"type":107,"tag":112,"props":254,"children":255},{},[256],{"type":116,"value":257},"Start with your gross monthly income.",{"type":116,"value":259}," Look at how much you earn each month before taxes. This gives you a starting point for the rest of the calculation. ",{"type":107,"tag":122,"props":261,"children":262},{},[263,268],{"type":107,"tag":112,"props":264,"children":265},{},[266],{"type":116,"value":267},"Estimate a housing payment using the 28% guideline.",{"type":116,"value":269}," Take your monthly income and calculate about 28% of it. This gives you a rough idea of a housing payment that many buyers find manageable.",{"type":107,"tag":122,"props":271,"children":272},{},[273,278],{"type":107,"tag":112,"props":274,"children":275},{},[276],{"type":116,"value":277},"Check how this fits with your other monthly debts.",{"type":116,"value":279}," Add up payments for debts like car loans, student loans or credit cards, then look at how they compare to your income. Remember, lots of lenders prefer your total monthly debts to stay under about 43% of your income before taxes.",{"type":107,"tag":122,"props":281,"children":282},{},[283,288],{"type":107,"tag":112,"props":284,"children":285},{},[286],{"type":116,"value":287},"Think about what feels comfortable for you based on your goals.",{"type":116,"value":289}," Numbers are helpful, but they’re not the whole story. You might prefer a lower payment so you have room for savings, travel or future expenses or more breathing room each month. ",{"type":107,"tag":108,"props":291,"children":292},{},[293,299],{"type":107,"tag":143,"props":294,"children":296},{"href":295},"/calculators/affordability/",[297],{"type":116,"value":298},"Mortgage calculators",{"type":116,"value":300}," can be a helpful way to test different scenarios. You can see how changes to the home price, down payment or loan type affect your monthly costs, which makes it easier to compare options and spot a payment range that feels workable.",{"type":107,"tag":108,"props":302,"children":303},{},[304,306,312,314,320,322,328],{"type":116,"value":305},"As you explore those scenarios, it can also help to look at the range of home loan options available that support different financial situations, from ",{"type":107,"tag":143,"props":307,"children":309},{"href":308},"/home-loans/conventional-loan/",[310],{"type":116,"value":311},"conventional loans",{"type":116,"value":313}," and ",{"type":107,"tag":143,"props":315,"children":317},{"href":316},"/home-loans/va-loan/",[318],{"type":116,"value":319},"VA loans",{"type":116,"value":321}," to ",{"type":107,"tag":143,"props":323,"children":325},{"href":324},"/home-loans/fha-loan/",[326],{"type":116,"value":327},"programs geared toward buyers who need more flexibility",{"type":116,"value":329},". Reviewing loan types alongside your budget can give you a clearer sense of how different choices may shape your monthly payment.",{"title":7,"searchDepth":157,"depth":157,"links":331},[],{"data":333,"body":335,"excerpt":-1,"toc":359},{"title":7,"description":334},"Seeing percentages translated into dollars can make them easier to understand. These examples show how the 28% guideline might translate into a real-life monthly mortgage payment: ",{"type":104,"children":336},[337,341,354],{"type":107,"tag":108,"props":338,"children":339},{},[340],{"type":116,"value":334},{"type":107,"tag":118,"props":342,"children":343},{},[344,349],{"type":107,"tag":122,"props":345,"children":346},{},[347],{"type":116,"value":348},"If your monthly income is $5,000, 28% comes out to roughly $1,400 for a monthly housing payment. ",{"type":107,"tag":122,"props":350,"children":351},{},[352],{"type":116,"value":353},"If your monthly income is $8,000, 28% works out to around $2,240 per month for housing costs.  ",{"type":107,"tag":108,"props":355,"children":356},{},[357],{"type":116,"value":358},"These figures include common housing costs like your mortgage payment, property taxes and homeowners insurance. They’re meant to provide examples, not to set a spending target. Your own comfortable number may be higher or lower depending on your budget and priorities.",{"title":7,"searchDepth":157,"depth":157,"links":360},[],{"data":362,"body":364,"excerpt":-1,"toc":375},{"title":7,"description":363},"Many buyers start with familiar benchmarks like the 28% guideline for housing costs and a broader look at total monthly debt. These numbers offer a helpful framework, but they don’t replace your own sense of what feels manageable.  ",{"type":104,"children":365},[366,370],{"type":107,"tag":108,"props":367,"children":368},{},[369],{"type":116,"value":363},{"type":107,"tag":108,"props":371,"children":372},{},[373],{"type":116,"value":374},"The most important step is choosing a monthly payment that fits your income, leaves room for other goals and feels sustainable over time. By understanding common guidelines, reviewing your full budget and exploring different loan options, you can move forward with more clarity as you plan for homeownership.",{"title":7,"searchDepth":157,"depth":157,"links":376},[],{"data":378,"body":379,"excerpt":-1,"toc":387},{"title":7,"description":7},{"type":104,"children":380},[381],{"type":107,"tag":382,"props":383,"children":386},"faq",{":faqs":384,"headline":385},"[{\"question\":\"What percentage of income should go toward a mortgage?\",\"answer\":\"The 28% guideline is often used as a starting point because it gives lenders and buyers a quick way to estimate whether a housing payment may be manageable. It suggests that your total monthly housing costs, not just the mortgage payment, should fall at or under 28% of your pre-tax income. While it’s a helpful reference, it’s not a hard limit, and the right number can vary depending on your income, debt and overall budget.\"},{\"question\":\"Can I spend more than 28% of my income on a mortgage?\",\"answer\":\"Some buyers do, especially if they have lower overall debt. Lenders review your full financial picture to determine affordability.\"},{\"question\":\"Does the 28% guideline apply to take-home pay or gross income? \",\"answer\":\"The 28% guideline is based on gross income, which is your income before taxes and other deductions. Lenders use gross income because it provides a consistent way to compare affordability across borrowers.\"},{\"question\":\"What if my housing costs are less than 28% of my income?\",\"answer\":\"Spending less than 28% on housing can give you more flexibility in your budget. It may leave additional room for savings, other financial goals or unexpected expenses, though the right amount ultimately depends on your personal priorities.\"}]","Mortgage income ratio FAQs",[],{"title":7,"searchDepth":157,"depth":157,"links":388},[],{"data":390,"body":391,"toc":397},{"title":7,"description":86},{"type":104,"children":392},[393],{"type":107,"tag":108,"props":394,"children":395},{},[396],{"type":116,"value":86},{"title":7,"searchDepth":157,"depth":157,"links":398},[],{"data":400,"body":402,"toc":408},{"title":7,"description":401},"Citi is #1 in Customer Satisfaction with Mortgage Origination - J.D. Power",{"type":104,"children":403},[404],{"type":107,"tag":108,"props":405,"children":406},{},[407],{"type":116,"value":401},{"title":7,"searchDepth":157,"depth":157,"links":409},[],{"data":411,"body":413,"toc":430},{"title":7,"description":412},"For J.D. Power 2025 award information, visit jdpower.com/awards.",{"type":104,"children":414},[415],{"type":107,"tag":108,"props":416,"children":417},{},[418,420,428],{"type":116,"value":419},"For J.D. Power 2025 award information, visit ",{"type":107,"tag":143,"props":421,"children":425},{"href":422,"rel":423},"https://www.jdpower.com/business/awards",[424],"nofollow",[426],{"type":116,"value":427},"jdpower.com/awards",{"type":116,"value":429},".",{"title":7,"searchDepth":157,"depth":157,"links":431},[],{"_path":433,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":99,"content":434,"_id":435,"_type":78,"title":436,"_source":80,"_file":437,"_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":439,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"content":440,"slug":441,"_id":442,"_type":78,"title":443,"_source":80,"_file":444,"_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":446,"body":448,"toc":459},{"title":7,"description":447},"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. 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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":465},[466,477],{"type":107,"tag":108,"props":467,"children":468},{},[469,475],{"type":107,"tag":470,"props":471,"children":472},"sup",{},[473],{"type":116,"value":474},"†",{"type":116,"value":476},"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":478,"children":479},{},[480],{"type":107,"tag":481,"props":482,"children":484},"span",{"lang":483},"es",[485],{"type":116,"value":486},"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":157,"depth":157,"links":488},[],{"data":490,"body":492,"excerpt":-1,"toc":498},{"title":7,"description":491},"Income consistency",{"type":104,"children":493},[494],{"type":107,"tag":108,"props":495,"children":496},{},[497],{"type":116,"value":491},{"title":7,"searchDepth":157,"depth":157,"links":499},[],{"data":501,"body":503,"excerpt":-1,"toc":509},{"title":7,"description":502},"How steady your income has been over time and how predictable it looks going forward",{"type":104,"children":504},[505],{"type":107,"tag":108,"props":506,"children":507},{},[508],{"type":116,"value":502},{"title":7,"searchDepth":157,"depth":157,"links":510},[],{"data":512,"body":514,"excerpt":-1,"toc":527},{"title":7,"description":513},"Credit score and history",{"type":104,"children":515},[516],{"type":107,"tag":108,"props":517,"children":518},{},[519,525],{"type":107,"tag":143,"props":520,"children":522},{"href":521},"/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/",[523],{"type":116,"value":524},"Credit score",{"type":116,"value":526}," and history",{"title":7,"searchDepth":157,"depth":157,"links":528},[],{"data":530,"body":532,"excerpt":-1,"toc":538},{"title":7,"description":531},"How you’ve handled borrowing and payments in the past shows how you manage financial commitments",{"type":104,"children":533},[534],{"type":107,"tag":108,"props":535,"children":536},{},[537],{"type":116,"value":531},{"title":7,"searchDepth":157,"depth":157,"links":539},[],{"data":541,"body":543,"excerpt":-1,"toc":556},{"title":7,"description":542},"Down payment amount",{"type":104,"children":544},[545],{"type":107,"tag":108,"props":546,"children":547},{},[548,554],{"type":107,"tag":143,"props":549,"children":551},{"href":550},"/home-buying/articles/how-much-down-payment-for-a-house/",[552],{"type":116,"value":553},"Down payment",{"type":116,"value":555}," amount",{"title":7,"searchDepth":157,"depth":157,"links":557},[],{"data":559,"body":561,"excerpt":-1,"toc":567},{"title":7,"description":560},"How much you’re able to put down upfront, which can affect both your loan structure and your monthly payment",{"type":104,"children":562},[563],{"type":107,"tag":108,"props":564,"children":565},{},[566],{"type":116,"value":560},{"title":7,"searchDepth":157,"depth":157,"links":568},[],{"data":570,"body":572,"excerpt":-1,"toc":578},{"title":7,"description":571},"Existing debt",{"type":104,"children":573},[574],{"type":107,"tag":108,"props":575,"children":576},{},[577],{"type":116,"value":571},{"title":7,"searchDepth":157,"depth":157,"links":579},[],{"data":581,"body":583,"excerpt":-1,"toc":589},{"title":7,"description":582},"Other regular payments you already have, such as car loans, student loans or credit cards",{"type":104,"children":584},[585],{"type":107,"tag":108,"props":586,"children":587},{},[588],{"type":116,"value":582},{"title":7,"searchDepth":157,"depth":157,"links":590},[],{"data":592,"body":594,"excerpt":-1,"toc":604},{"title":7,"description":593},"Loan type",{"type":104,"children":595},[596],{"type":107,"tag":108,"props":597,"children":598},{},[599],{"type":107,"tag":143,"props":600,"children":602},{"href":601},"/home-loans/",[603],{"type":116,"value":593},{"title":7,"searchDepth":157,"depth":157,"links":605},[],{"data":607,"body":609,"excerpt":-1,"toc":615},{"title":7,"description":608},"How your mortgage is structured, which can influence the monthly payment",{"type":104,"children":610},[611],{"type":107,"tag":108,"props":612,"children":613},{},[614],{"type":116,"value":608},{"title":7,"searchDepth":157,"depth":157,"links":616},[],{"data":618,"body":620,"excerpt":-1,"toc":639},{"title":7,"description":619},"Property taxes and insurance",{"type":104,"children":621},[622],{"type":107,"tag":108,"props":623,"children":624},{},[625,631,633],{"type":107,"tag":143,"props":626,"children":628},{"href":627},"/home-buying/articles/are-property-taxes-included-in-mortgage-payment/",[629],{"type":116,"value":630},"Property taxes",{"type":116,"value":632}," and ",{"type":107,"tag":143,"props":634,"children":636},{"href":635},"/home-buying/articles/what-is-homeowners-insurance/",[637],{"type":116,"value":638},"insurance",{"title":7,"searchDepth":157,"depth":157,"links":640},[],{"data":642,"body":644,"excerpt":-1,"toc":650},{"title":7,"description":643},"Costs that vary by location but play a meaningful role in your overall monthly housing expense",{"type":104,"children":645},[646],{"type":107,"tag":108,"props":647,"children":648},{},[649],{"type":116,"value":643},{"title":7,"searchDepth":157,"depth":157,"links":651},[],[653,725,773,825,868,923,968],{"_path":654,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":656,"l1":655,"linkNav":657,"heroMedia":661,"teaserImage":664,"slug":666,"disclosure":99,"sections":667,"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-loans/types-of-loans","home-loans",6,{"introText":658,"text":659,"to":660},"Ready for the next step?","Connect with a Citi Specialist","/contact",{"landscape":662,"portrait":663},"/media/article-different-mortgage-loans-available-mobile-768x512.jpg","/media/article-different-mortgage-loans-available-desktop-520x638.jpg",{"src":665},"/media/article-different-mortgage-loans-available-teaser-500x500.jpg","types-of-loans",[668,671,674,677,679,682,685,688,691,694],{"title":669,"hideTitle":27,"content":670},"Disclaimer","Disclaimer: Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":672,"content":673},"Conventional loans","Welcome to the most popular home loan option, a common route for buyers or refinancers with solid credit. A [conventional loan](/home-loans/conventional-loan/) is not backed directly by the government, but is supported by government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac. These GSEs are responsible for keeping the mortgage market healthy and stable, so banks can offer more loans and people can afford to buy homes.  \n\n### Who qualifies for a conventional loan? \n\n* Credit score of at least 620 \n* 3––20% down payment saved up\n* Low debt-to-income ratio (often 36% or lower) \n\n::callout{title=\"Conventional Loans vs. Government-backed loans\" body=\"Government-backed loans are insured by government agencies, meaning agencies foot the bill if a borrower defaults. Conventional loans are supported by government-sponsored entities but aren’t government-insured, so lenders have stricter loan qualification requirements to minimize risk.\" :media='{\"landscape\":\"/media/gettyimages-174764619.png\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::\n\n### Pros and cons of conventional loans \n\n::content-table{:tableData='[{\"row\":[{\"column\":\"Pros\"},{\"column\":\"Cons\"}]},{\"row\":[{\"column\":\"Can be used to finance a wide range of properties\"},{\"column\":\"Stricter requirements for credit scores and financial stability\"}]},{\"row\":[{\"column\":\"Private mortgage insurance not required with down payment of 20% or more\"},{\"column\":\"Private mortgage insurance typically required if down payment is under 20%\"}]},{\"row\":[{\"column\":\"Offers generally lower interest rates to buyers with good credit\"}]}]'}\n::",{"title":675,"content":676},"FHA loans","Ready to dig into government-backed types of mortgage loans? First, let’s start with home loan options for low-income buyers and those with imperfect credit. A [Federal Housing Administration (FHA) loan](/home-loans/fha-loan/) is a great solution for those who don’t have sterling silver credit or much cash handy for a down payment. In fact, it’s considered one of the best mortgage loans for [first-time buyers](/home-buying/articles/first-time-home-buyer/)—though you don’t need to be a first-timer to qualify for one. If you qualify for an FHA loan, you’ll get interest rates comparable to those of conventional loans. Keep in mind that there are a few strings attached, such as limits and required fees.\n\n::tip{icon=\"Bulb\" text=\"You might know that first-time homeowners have access to special programs and loan terms. But did you know that some former homeowners can apply as first-timers? As long as you haven’t owned a home in the last three years, you may qualify for first-time buyer programs and land more favorable terms.\" title=\"Pro TIp\"}\n::\n\nFHA loan requirements \n\n* Credit score of at least 500 (varies by lender) \n* Down payment as low as 3.5%  \n* More lenient debt-to-income ratio (often capped at 43%) \n* Required upfront & annual fee instead of PMI\n\n### FHA vs. conventional loans\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"FHA Loan\"},{\"value\":\"Conventional Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"Credit Score\",\"valueTwo\":\"580+ (sometimes 500+)\",\"valueThree\":\"620+\"}},{\"column\":{\"valueOne\":\"Down Payment\",\"valueTwo\":\"3.5%-10%\",\"valueThree\":\"3%-20%\"}},{\"column\":{\"valueOne\":\"PMI Requirements\",\"valueTwo\":\"Upfront & annual fee instead of PMI\",\"valueThree\":\"Mandatory if down payment is less than 20%\"}},{\"column\":{\"valueOne\":\"Best For\",\"valueTwo\":\"First-time buyers, lower credit scores\",\"valueThree\":\"Buyers with strong credit and higher income\"}}]'}\n::",{"title":319,"content":678},"The U.S. Department of Veterans Affairs (VA) gives military folks an extra hand with mortgage. Military veterans, active-duty service members and surviving spouses can buy or refinance a \nhome with a [VA loan](/home-loans/va-loan/) for flexible requirements and generous loan terms. \n\n### Benefits of VA loans \n\n* Low interest rates compared to conventional loans  \n* Zero down payment required  \n* No limit on amount you can borrow \n\n### VA loan eligibility \n\n* Certificate of Eligibility (COE) to verify military service  \n* Credit score of 620+ typically required  \n* Debt-to-income ratio of 41% or less preferred  \n* For [primary residences](/home-buying/articles/primary-residence/) only",{"title":680,"content":681},"USDA loans","If you’re on the hunt for a quaint little spot in the country or the suburbs, the U.S. Department of Agriculture (USDA) may help you sort the wheat from the chaff of home loans. [USDA loans](/home-loans/usda-loan/) offer up great benefits for rural residents: no down payment, low interest rates and affordable insurance costs.  \n\n### USDA loan requirements\n\n* Credit score of 640+ often required  \n* Debt-to-income ratio of 41% or less preferred  \n* Household income can’t exceed 115% of regional median income \n* Upfront guarantee fee & annual fee instead of private mortgage insurance  \n\n### USDA loan vs. FHA loan\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"USDA Loan\"},{\"value\":\"FHA Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"Down Payment\",\"valueTwo\":\"0%\",\"valueThree\":\"3.5%\"}},{\"column\":{\"valueOne\":\"Credit Score\",\"valueTwo\":\"640+ preferred\",\"valueThree\":\"580+ (sometimes 500+)\"}},{\"column\":{\"valueOne\":\"PMI Required?\",\"valueTwo\":\"Guarantee & annual fee instead of PMI\",\"valueThree\":\"Guarantee & annual fee instead of PMI\"}}]'}\n::",{"title":683,"content":684},"Jumbo loans","[Jumbo loans](/home-loans/jumbo-loan/) (aka non-conforming loans) are what they sound like: bigger loans for bigger price tags. Jumbo loans let you borrow more than the standard or “conforming” loan limits set by the Federal Housing Finance Agency (FHFA). You can finance a primary home, secondary home, vacation home or an investment property, but you’ll be up against strict financial requirements and sometimes higher interest rates because jumbo loans pose a greater risk to lenders.    \n\n### When do you need a jumbo loan? \n\n* Buying a high-cost or luxury property \n* Borrowing more than conforming loan limits \n* Financing properties not eligible for conventional loans  \n\n### Qualification for a jumbo loan \n\n* Minimum credit score of 700 \n* Debt-to-income ratio of 43% or less preferred  \n* Private mortgage insurance may or may not be required \n* Proof of consistent income in recent years",{"title":686,"content":687},"Adjustable-rate mortgages (ARMs)","Not only are there different types of mortgages, but there are also different types of interest rates. When you have an [adjustable-rate mortgage](/home-loans/adjustable-rate/), your interest rate fluctuates over the loan’s duration. Initially, the rate is fixed for a set period, typically 3 to 10 years. After that period, your interest rate can rise or fall based on market conditions, causing your mortgage bill to change with it. Adjustable-rate mortgages are appealing if you want to take advantage of the initial low-rate period and plan to sell or refinance soon. \n\n### How ARMs work \n\nOnce the initial rate period is over, why do rates change? Two factors are at play here: the index and the margin. The index is the baseline interest rate, which is influenced by broader economic conditions. The margin is outlined in your loan agreement and dictates just how much your rate can fluctuate over the life of the loan. Together, these two factors dictate your rate adjustment. Keep in mind that the unpredictability of adjustable rates can make it challenging to plan your mortgage budget.  \n\n### ARMs vs. fixed-rate mortgages\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"ARM\"},{\"value\":\"Fixed-Rate\"}]' :rows='[{\"column\":{\"valueOne\":\"Initial Interest Rate\",\"valueTwo\":\"Lower\",\"valueThree\":\"Higher\"}},{\"column\":{\"valueOne\":\"Payment Stability\",\"valueTwo\":\"Changes over time\",\"valueThree\":\"Stays the same\"}},{\"column\":{\"valueOne\":\"Best For\",\"valueTwo\":\"Short-term homeowners\",\"valueThree\":\"Long-term homeowners\"}}]'}\n::",{"title":689,"content":690},"Fixed-rate mortgages","[Fixed-rate mortgages](/home-loans/fixed-rate/) lock you into one constant interest rate during a loan. That means steady, predictable payments and no unwelcome surprises on your mortgage bill.  \n\n### Benefits of fixed-rate mortgages \n\n*  Predictable payments  \n* Protection from interest rate spikes \n*  Ability to accurately budget for mortgage payments \n\n### 15-year vs. 30-year fixed loans \n\nMost people choose a 15-year fixed or 30-year fixed loan, depending on their financial situation. If you can afford higher monthly payments, a 15-year fixed mortgage will cost you less in total interest over time. If you’re juggling several debts (hello, car payments and student loans), a 30-year fixed term can reduce financial pressure in the short term.   \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"15-Year\"},{\"value\":\"30-Year\"}]' :rows='[{\"column\":{\"valueOne\":\"Monthly Payment\",\"valueTwo\":\"Higher\",\"valueThree\":\"Lower\"}},{\"column\":{\"valueOne\":\"Total Interest Paid\",\"valueTwo\":\"Less\",\"valueThree\":\"More\"}},{\"column\":{\"valueOne\":\"Loan Payoff Time\",\"valueTwo\":\"Shorter\",\"valueThree\":\"Longer\"}}]'}\n::",{"title":692,"content":693},"Home equity line of credit (HELOC)","If you’re a current homeowner in need of cash flow, a HELOC could be a safe bet. A HELOC is a revolving credit line (much like a credit card) that lets you borrow against your home equity. HELOCs usually have lower interest rates because lenders shoulder less risk when your home is collateral.   \n\n### HELOC vs. home equity loan\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"HELOC\"},{\"value\":\"Home Equity Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"Payout\",\"valueTwo\":\"Revolving credit line\",\"valueThree\":\"Lump Sum\"}},{\"column\":{\"valueOne\":\"Interest Rate\",\"valueTwo\":\"Variable\",\"valueThree\":\"Fixed\"}},{\"column\":{\"valueOne\":\"Best For\",\"valueTwo\":\"Ongoing expenses\",\"valueThree\":\"One-time expenses\"}}]'}\n::\n\nBest uses for a HELOC \n\n* Renovations that may increase your home value  \n* Consolidation of debts that have higher interest rates  \n* Ongoing access to funds for big projects or emergencies",{"title":695,"hideTitle":27,"content":696},"Types of home loan FAQs","::faq{headline=\"Types of home loan FAQs\" :faqs='[{\"question\":\"What is the difference between a fixed-rate and an adjustable-rate mortgage?\",\"answer\":\"The interest rate for a fixed-rate mortgage stays the same over the life of the loan, so you always know how much you’ll owe. In contrast, adjustable-rate mortgages (ARMs) fluctuate with market conditions, meaning the interest rate can rise or fall over time, impacting your mortgage payment.\"},{\"question\":\"How do I determine which home loan type is best for me?\",\"answer\":\"Weighing different types of home loans? When choosing the right mortgage, two factors come into play: meeting eligibility requirements and feeling financially comfortable with the terms of the loan. Before deciding, compare the loans you qualify for and do a little math to see which loan will save you the most money over the life of the loan.\"},{\"question\":\"What are the benefits of government-backed loans like FHA, VA and USDA?\",\"answer\":\"Government-backed loans typically have more forgiving requirements and favorable terms compared to conventional loans. FHA loans accept lower credit scores and down payments as low as 3.5%. VA loans boast no down payments or private mortgage insurance for military folks. USDA loans help rural buyers avoid a down payment altogether.\"},{\"question\":\"Can I qualify for a home loan with a low credit score?\",\"answer\":\"Having a low credit score may limit your options, but government-backed loans like FHA, VA and USDA loans can help you secure a home without perfect finances. Also, consider looking into local charities or organizations that help community members become homeowners.\"},{\"question\":\"What is private mortgage insurance (PMI), and when is it required?\",\"answer\":\"Lenders rely on private mortgage insurance to protect the money you’re borrowing. If you put down less than 20%, lenders typically require you to get mortgage insurance to cover potential losses in case you miss payments.\"},{\"question\":\"How does my down payment affect my loan options?\",\"answer\":\"A larger down payment sets you up for success. The more you put down, the better. It is easier to qualify for loans, lock in a low interest rate and avoid mortgage insurance when your down payment is 20% or more.\"}]'}\n::","2026-06-22T10:59:00.000Z","Conventional loans, government loans, jumbo loans—oh my! Picking the right type of home loan is just as important as putting down roots, but there are lots of options to sift through. Let’s get familiar with mortgage types so you can understand your options and decide which path is a good fit, whether you’re hoping to buy or refinance.","Understanding different home loan types",[701,702,655],"home-buying","loan-types",{"introText":704,"body":705,"text":659,"to":660},"Want an expert’s POV on the right loan for you?","Get a professional’s take on your financial needs and ideal loan options.",{"title":707,"description":708},"Understanding Different Home Loan Types | Citi Mortgage","Explore the different types of mortgage loans available, including conventional, FHA, VA, jumbo, and more. Find the best home loan for your needs.","content:articles:home-loans:types-of-loans.json","Types Of Loans","articles/home-loans/types-of-loans.json",[713,717,721],{"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 Buying",{"description":720},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"label":722,"slug":655,"seo":723},"Home Loans",{"description":724},"Explore resources about home loans—including types, requirements, and how to choose the right mortgage option.",{"_path":726,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":727,"l1":655,"linkNav":728,"heroMedia":729,"teaserImage":732,"slug":734,"sections":735,"date":748,"subheadline":749,"headline":750,"dateModified":751,"isFeatured":6,"tags":752,"link":755,"seo":758,"hasSectionNavigation":27,"_id":761,"_type":78,"title":762,"_source":80,"_file":763,"_extension":78,"tagsDetails":764},"/articles/home-loans/how-to-lower-mortgage-payment",5,{"introText":658,"text":659,"to":660},{"landscape":730,"portrait":731},"/media/how-to-lower-your-mortgage-payment-mobile-768x512.jpg","/media/how-to-lower-your-mortgage-payment-desktop-520x638.jpg",{"src":733},"/media/how-to-lower-your-mortgage-payment-teaser-500x500.jpg","how-to-lower-mortgage-payment",[736,739,742,745],{"title":737,"content":738},"Options to lower your mortgage payment without refinancing","Not every solution requires a new loan. These options focus on reducing expenses tied to your mortgage, like insurance, taxes or how your loan is structured.\n\n### **Recast your mortgage**\n\nA mortgage recast lets you make a one-time lump-sum payment toward your principal. In return, your lender recalculates your monthly payments—based on your new, lower balance—while keeping your original interest rate and term. This can reduce your monthly payments without the closing costs or paperwork of refinancing. Just note that recasts are typically available only for conventional loans in good standing, and some lenders charge a small administrative fee.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Not all lenders offer mortgage recasts, and government-backed loans (FHA, VA, USDA) usually aren’t eligible. Be sure to check with your lender before making a lump-sum payment.\"}\n::\n\n### **Eliminate Private Mortgage Insurance (PMI)**\n\nIf you put down less than 20% when you bought your home, you’re likely paying PMI, a type of insurance that protects the lender if you stop making payments. In most cases, lenders are required to cancel it once you reach 22% equity, as long as your payments are current. For more details, check your lender’s policy or official [PMI removal guidelines](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/).\n\n::content-table{body=\"At a glance: when PMI can be removed\" :tableData='[{\"row\":[{\"column\":\"Equity in home\"},{\"column\":\"What happens with PMI*\"}]},{\"row\":[{\"column\":\"20%\"},{\"column\":\"You may be able to request removal (an appraisal is often required)\"}]},{\"row\":[{\"column\":\"22%\"},{\"column\":\"Lender must remove automatically on most conventional loans (if your payments are current)\"}]}]' support=\"*Not all loans are eligible for PMI removal. Check your lender’s guidelines.\"}\n::\n\n### **Appeal your property taxes**\n\nIf your home’s assessed value seems higher than comparable homes in your neighborhood, you may be overpaying on property taxes. Filing an appeal with local tax authorities—using comparable sales data as evidence—could lower your assessment. When escrow is included in your monthly payment, a lower tax bill can reduce your escrow payments, which may bring down your monthly mortgage amount.\n\n::tip{icon=\"Bulb\" text=\"Even a small change in property tax assessments can change your escrow amount. Your lender will adjust your monthly mortgage payment after your next escrow analysis.\" title=\"PRO TIP\"}\n::\n\n### **Shop around for homeowners’ insurance**\n\nYour homeowners’ insurance is typically part of your monthly mortgage payment (through escrow), so finding a lower premium can make a real difference. Compare providers annually or consider raising your deductible or bundling policies to potentially lower monthly mortgage costs without changing your loan.",{"title":740,"content":741},"Options that involve refinancing or loan adjustments","Sometimes the most effective way to lower your mortgage payment is to change the terms of your loan. These options often bring more savings but come with additional considerations.\n\n### **Refinance to a lower interest rate or longer term**\n\nRefinancing replaces your current mortgage with a new one, possibly with a lower interest rate or with a longer repayment term. Either option can lower your monthly payment.\n\nSwitching [mortgage types](/home-loans/articles/types-of-loans/) can sometimes help you save. For example, refinancing from a fixed-rate loan to an [adjustable-rate mortgage (ARM)](/home-loans/adjustable-rate/) may initially lower your mortgage payment. But there are risks to consider. Refinancing comes with closing costs, extending your term can increase the total interest you pay and, in the case of an ARM, your payment can rise in the future if interest rates go up.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\" Try our [Mortgage Refinance Calculator](/calculators/refinance/) to estimate how much you could save—or lower your mortgage payments—before deciding if refinancing is right for you..\"}\n::\n\n### **Consider a mortgage loan modification**\n\nA mortgage loan modification changes the terms of your existing loan. Lenders may reduce your interest rate, extend the term or switch the loan type to help you afford your payments. This is typically an option for borrowers facing hardship who may not qualify for refinance. While it can make payments affordable, it requires documentation and may lengthen repayment or affect your credit. Carefully consider what kind of modification is offered because if you still can’t make the payments, you could risk losing your home.\n\n### **Explore forbearance**\n\nForbearance is a temporary pause or reduction in payments. It’s helpful during financial emergencies like natural disaster, job loss or medical expenses. It won’t erase your debt, and you’ll need to repay missed payments later either as a lump sum, through a repayment plan or by adding them to your loan balance. Forbearance is best viewed as a last resort, but it can buy you time when you need it most.",{"title":743,"content":744},"Smart money moves to manage payments","You don’t always need to change your loan to feel some relief. A few financial strategies can help reduce mortgage stress over time.\n\n### **Adjust your budget and payment schedule**\n\nMaking biweekly mortgage payments, instead of monthly ones, can slightly lower your loan term and interest over time. It also spreads costs more evenly.  Budgeting carefully—especially by cutting nonessential spending—can improve your [debt-to-income ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) and free up more money for housing costs. Just make sure your biweekly payments still meet the monthly minimum payment your lender requires.\n\n::callout{:media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}' title=\"Did you know?\" body=\"Making biweekly payments chalks up to 26 half-payments per year—equal to 13 full payments. That one extra payment each year can reduce your principal faster.\"}\n::\n\n### **Make extra principal payments when possible**\n\nEven modest extra payments—$50 or $100 a month—can help reduce your balance and lifetime interest. Pay extra only when your budget allows, but know that every bit counts toward building equity.",{"title":746,"hideTitle":27,"content":747},"FAQs about lowering your mortgage","::faq{headline=\"FAQs about lowering your mortgage\" :faqs='[{\"question\":\"What’s the best way to lower your mortgage payment?\",\"answer\":\"There’s no single best way—it depends on your loan, equity and goals. Some homeowners benefit from refinancing or recasting, while others save by removing PMI, adjusting insurance or appealing property taxes. The right approach depends on your loan terms and financial circumstances.\"},{\"question\":\"Can I lower my mortgage payment without refinancing?\",\"answer\":\"Potentially, yes. Options may include recasting after a lump-sum principal payment, requesting PMI removal when you have sufficient equity, appealing your property tax assessment or making changes to homeowners’ insurance. Each option has its own requirements and potential savings.\"},{\"question\":\"Will removing PMI lower my mortgage payment?\",\"answer\":\"Yes, if you’re eligible. Once you reach about 20% equity in your home, you can typically request cancellation. Your lender may require an appraisal. PMI is also automatically removed at 22% equity if your payments are current.\"},{\"question\":\"Can you negotiate mortgage payments with your lender?\",\"answer\":\"In certain circumstances, yes. If you’re experiencing financial hardship you may be able to request a loan modification, repayment plan or temporary forbearance. These options require lender approval and documentation, and they may affect your credit or loan terms.\"},{\"question\":\"Is it better to refinance or recast a mortgage?\",\"answer\":\"The answer depends on your financial situation. A recast involves making a lump-sum payment and recalculating your existing loan. Refinancing replaces your mortgage with a new one that may have a different rate, term or loan type. Both have pros, cons, costs and eligibility requirements, so it’s important to review the details with your lender before deciding.\"},{\"question\":\"How do I know if recasting my mortgage is an option?\",\"answer\":\"Start by asking your lender if they offer mortgage recasting—it’s typically available only on conventional loans. You’ll also need to be current on payments, make a significant lump-sum payment toward the principal and pay a small processing fee. Government-backed loans (FHA, VA, USDA) usually don’t qualify.\"},{\"question\":\"Can property taxes or insurance change changes lower my monthly mortgage?\",\"answer\":\"Yes—if you escrow these costs. A successful tax appeal or a lower homeowners’ insurance premium can reduce the escrow portion of your monthly payment after your next escrow analysis. These changes won’t affect your principal and interest payment, but they can lower your total monthly mortgage payment after your lender updates your escrow.\"}]'}\n::","2025-10-03T15:25:00.000Z","If rising interest rates and everyday expenses are squeezing your budget, you’re not alone. Many homeowners are looking for ways to lower mortgage payments and make monthly costs more manageable. The good news is there are several strategies—some simple, some more involved—that may help bring your payment down. Whether you’re looking to cut costs without changing your loan or exploring bigger-picture options like refinancing, here’s what to know.","How to lower mortgage payments","2026-01-08T06:31:00.000Z",[655,753,754],"refinancing","lower-payments",{"introText":756,"body":757,"text":659,"to":660},"Wondering how to lower your mortgage payment?","We can walk you through the options and potential next steps.",{"title":759,"description":760},"How to Lower Mortgage Payments | Mortgage.com","There are different ways to lower your monthly mortgage payment. Explore strategies like refinancing, recasting, and removing PMI to reduce housing costs.","content:articles:home-loans:how-to-lower-mortgage-payment.json","How To Lower Mortgage Payment","articles/home-loans/how-to-lower-mortgage-payment.json",[765,721,769],{"label":766,"slug":754,"seo":767},"Lower Payments",{"description":768},"Learn more about lower payments with helpful articles, tools, and guides to support your homeownership journey.",{"label":770,"slug":753,"seo":771},"Refinancing",{"description":772},"Learn more about refinancing with helpful articles, tools, and guides to support your homeownership journey.",{"_path":774,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":727,"l1":655,"linkNav":775,"heroMedia":776,"teaserImage":779,"slug":781,"sections":782,"date":804,"subheadline":805,"headline":790,"isFeatured":6,"tags":806,"link":809,"seo":812,"hasSectionNavigation":27,"_id":815,"_type":78,"title":816,"_source":80,"_file":817,"_extension":78,"tagsDetails":818},"/articles/home-loans/heloc-as-down-payment-second-home",{"introText":658,"text":659,"to":660},{"landscape":777,"portrait":778},"/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-mobile-768x512.jpg","/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-desktop-520x638.jpg",{"src":780},"/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-teaser-500x500.jpg","heloc-as-down-payment-second-home",[783,786,789,792,795,798,801],{"title":784,"content":785},"What is a HELOC?","A home equity line of credit ([HELOC](/home-loans/heloc/)) is a flexible way of tapping home equity, converting a portion of your home’s value into accessible cash. It’s a second mortgage that gives you a set amount of credit to draw from, secured by your home. \n\nThe loan has two distinct phases: a draw period where you can borrow money as needed, and a repayment period to pay off the balance. This makes a HELOC an excellent tool for funding ongoing expenses or a series of projects, since you pay interest only on the money you’ve actually used.\n\nWhile it offers flexibility, keep in mind that HELOCs have a variable interest rate, which means your payment can change over time based on the [fluctuation of interest rates](/rates/articles/federal-reserve-interest-rates/).",{"title":787,"content":788},"Is a HELOC a second mortgage?","Yes, a HELOC is a type of second mortgage. But the terms aren’t exactly interchangeable. Let’s dig into the second mortgage vs. HELOC comparison.\n\n“Second mortgage” refers broadly to any loan that’s secured by your home and takes second position behind your [primary mortgage](/home-loans/articles/types-of-loans/). That includes both HELOCs and home equity loans.\n\nUnlike HELOCs, [home equity loans](/home-loans/home-equity/) provide a lump sum up front with a fixed interest rate.\n\nHere is a quick comparison of the two. If you want more details, deep dive into [HELOCs vs. home equity loans](/home-loans/articles/heloc-vs-home-equity-loan/).\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"HELOC\"},{\"value\":\"Home Equity Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"How it works\",\"valueTwo\":\"Revolving line of credit\",\"valueThree\":\"Lump sum loan\"}},{\"column\":{\"valueOne\":\"Interest\",\"valueTwo\":\"Usually variable; interest is only on what you borrow\",\"valueThree\":\"Fixed rate on the full amount\"}},{\"column\":{\"valueOne\":\"Repayment\",\"valueTwo\":\"Interest-only during draw period, then principal and interest payments\",\"valueThree\":\"Fixed monthly payments until paid off\"}}]'}\n::",{"title":790,"content":791},"Can you use a HELOC for a down payment on a second home?","Yes—in some cases. Using a HELOC to fund a [second home](/home-buying/articles/second-home/) down payment is a popular strategy for homeowners who want to access their equity without draining their cash savings. However, this approach adds another layer of debt and is subject to strict lender requirements. \n\n### Lender requirements and restrictions\n\nEvery lender has specific rules around using HELOCs for investment property or a second home. Always confirm the HELOC second home rules up front to avoid surprises during underwriting.\n\n### Loan-to-value (LTV) limits and credit considerations\n\nLenders evaluate your financial profile when you’re leveraging equity, including:\n\n**Credit and DTI:** You’ll need a [strong credit](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) score (often a 680+ FICO® score) and a healthy [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/).\n\n**Your home’s equity:** Most lenders require you to maintain a certain amount of equity in your primary home—typically 15%-20%—even after a HELOC is taken out.\n\n**Loan purpose:** Some lenders prohibit the use of a HELOC for a down payment on another property, while others may require a larger down payment or more cash reserves.",{"title":793,"content":794},"Pros and cons of using a HELOC for a second home","A HELOC can be a useful tool, but make sure you do your homework on the pros and cons before you commit. Use our [HELOC calculator](/calculators/heloc/) to estimate the costs and see if it’s the right home equity financing option for you.\n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros\"},{\"column\":\"Cons\"}]},{\"row\":[{\"column\":\"Access cash without selling investments or draining savings\"},{\"column\":\"Your monthly payments may rise if interest rates go up\"}]},{\"row\":[{\"column\":\"The ability to draw funds as you need them\"},{\"column\":\"Not all lenders allow a HELOC for a second home down payment\"}]},{\"row\":[{\"column\":\"Flexible funds can also cover unexpected costs after closing\"},{\"column\":\"Adds another layer of debt and risk to your primary home\"}]}]'}\n::",{"title":796,"content":797},"Alternatives to HELOCs for your down payment","If a HELOC isn’t right for you, check out other mortgage down payment sources:\n\n* **[Cash-out refinance](/refinancing/articles/cash-out/)**: Replace your primary mortgage with a larger one and receive the difference in cash.\n* **Personal loan:** An unsecured loan that typically has higher interest rates than a HELOC.\n* **Retirement account loan:** Borrow from a 401(k) or similar plan but be aware that this reduces your retirement savings.\n* **Saving over time:** The safest option, as it avoids adding any new debt.",{"title":799,"content":800},"How to apply for a HELOC","The HELOC application process is similar to that of a mortgage: you’ll need documentation for your income, assets and the property itself. The lender will then review your equity, credit score and DTI ratio to set your borrowing limit and terms.",{"title":802,"hideTitle":27,"content":803},"FAQs: Using a HELOC for a second home","\n\n::faq{headline=\"FAQs: Using a HELOC for a second home\" :faqs='[{\"question\":\"Is a HELOC considered a second mortgage?\",\"answer\":\"Yes, a HELOC is one type of second mortgage.\"},{\"question\":\"Can you use a HELOC for the down payment on an investment property?\",\"answer\":\"Some lenders allow this, but the requirements and restrictions are often stricter than for a second home.\"},{\"question\":\"What credit score do you need for a HELOC?\",\"answer\":\"Most lenders look for a FICO credit score of 620 or higher. However, you will likely need a score of 680+ when using the HELOC for a second-home purchase.\"},{\"question\":\"How much can you borrow with a HELOC?\",\"answer\":\"HELOC lenders generally let you tap into about 85% of your home’s value after subtracting what you still owe on your mortgage and other home loans.\"},{\"question\":\"What are the risks of using a HELOC for a down payment?\",\"answer\":\"Using a HELOC for a down payment can be risky because you’ll be paying off loans for two homes, which can make managing payments difficult. HELOCs also have variable interest rates, so your payments can unexpectedly rise.\"}]'}\n::","2025-09-29T13:30:00.000Z","HELOCs are a popular and flexible way for homeowners to access the equity they’ve built, but how exactly can you use them? Lots of homeowners wonder how to pay for something using a HELOC balance or if they can use a HELOC to buy another house. The short answer is that a HELOC can be used for both, but not always. Think of it as a revolving line of credit that lets you borrow money up to a set limit and pay interest only on the amount you use. Learn how HELOCs work, how they compare to home equity loans, the pros and cons and alternative down payment financing options.",[701,807,808],"refinancing-process","budget-planning",{"introText":810,"body":811,"text":659,"to":660},"Questions about using a HELOC for a second home?","We can walk you through eligibility, lender requirements and alternatives.",{"title":813,"description":814},"Using a HELOC Towards Buying a Second Home | Citi Mortgage","Learn if you can use a HELOC as a down payment on a second home, how lenders view it, the risks involved, and alternative financing options.","content:articles:home-loans:heloc-as-down-payment-second-home.json","Heloc As Down Payment Second Home","articles/home-loans/heloc-as-down-payment-second-home.json",[819,823,717],{"label":820,"slug":808,"seo":821},"Budget Planning",{"description":822},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":824,"slug":807},"Refinancing Process",{"_path":826,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":827,"l1":655,"linkNav":828,"heroMedia":829,"teaserImage":832,"slug":834,"sections":835,"date":853,"subheadline":854,"headline":855,"isFeatured":6,"tags":856,"leadGenLoanPurpose":857,"link":858,"seo":861,"hasSectionNavigation":27,"_id":864,"_type":78,"title":865,"_source":80,"_file":866,"_extension":78,"tagsDetails":867},"/articles/home-loans/heloc-to-buy-another-property",3,{"introText":658,"text":659,"to":660},{"landscape":830,"portrait":831},"/media/can-you-use-a-heloc-to-buy-another-property-mobile-768x512.jpg","/media/can-you-use-a-heloc-to-buy-another-property-desktop-520x638.jpg",{"src":833},"/media/can-you-use-a-heloc-to-buy-another-property-teaser-500x500.jpg","heloc-to-buy-another-property",[836,838,841,844,847,850],{"title":784,"content":837},"A [home equity line of credit (HELOC)](/home-loans/heloc/) is a flexible way to borrow cash using the equity in your home. It offers a revolving line of credit—like a credit card—that lets you borrow as needed up to a set limit over a predetermined period. Your lender will set your terms and borrowing limit based on how much home equity you have and the strength of your financial profile.\n\nHELOCs have two stages:\n\n* **Draw period:** When you can take out funds as needed, usually paying only interest on what you borrow.\n* **Repayment period:** When you pay back the principal and additional interest as a monthly payment.\n\nWondering how to pay for something using a HELOC balance? Homeowners often use HELOCs to fund big expenses when they aren’t sure how much they’ll need—think home renovations or large expenses. But keep in mind that HELOC [interest rates](/rates/) are typically [variable rather than fixed](/home-loans/articles/fixed-vs-adjustable-rate/), so your repayments could increase if rates rise.",{"title":839,"content":840},"How a HELOC can be used to buy another property","Want to take on a residential investment property, snag a [second home](/home-buying/articles/second-home/) or buy rental property with a HELOC? If you are short on liquid cash but have a solid chunk of home equity, it’s possible to use a HELOC for a down payment. In rare cases, you may even have enough equity to buy a property outright! HELOCs typically let you borrow up to 85% of your home’s market value, minus what you owe on the mortgage. For instance, if your house is worth $400,000, your maximum borrowing potential would be $340,000. But if you still owe $100,000 on your mortgage, you could borrow the difference—up to $240,000 as a down payment financing option.\n\n### **Lender rules and requirements**\n\nEvery lender has different requirements, especially when it comes to funding second properties with HELOCs. In general, you need a stronger financial profile to prove you can juggle multiple properties and additional debt. Let’s check out common requirements.\n\n* **Loan-to-value (LTV) ratio:** Your LTV compares your mortgage balance to your home’s current market value. Most banks require an LTV of 85% or less, so you should aim to have about 20% equity in your home. \n* **Minimum [credit scores](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/):** For HELOCs in general, many lenders want to see a FICO® score of at least 680. When the loan is for another property, lenders may expect even higher scores.\n* **DTI/income requirements:**  A [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) of 43% or less shows you can comfortably pay off your debts with your monthly income. Some lenders will allow a higher DTI of up to 50% with a strong FICO credit score. Your lender may have specific income criteria as well.\n* **Property restrictions:** Not every lender will let you use home equity to buy another place, especially if you still need a mortgage to pay it off. Some lenders even reserve home equity loans for [primary home](/home-buying/articles/primary-residence/) expenses only, like renovations or repairs.\n* **Minimum loan:** Some lenders have a minimum amount they are willing to loan. In certain states, the minimum amount of a HELOC loan is set by law.",{"title":842,"content":843},"Pros and cons of using a HELOC to buy another property","::content-table{:useBullets=true :tableData='[{\"row\":[{\"column\":\"Pros\"},{\"column\":\"Cons\"}]},{\"row\":[{\"column\":\"Quick access to cash without draining savings or liquidating other investments\"},{\"column\":\"Payments can rise if interest rates increase\"}]},{\"row\":[{\"column\":\"Flexible funding for unexpected expenses after closing\"},{\"column\":\"Not always allowed to finance a second property\"}]},{\"row\":[{\"column\":\"Often lower rates than personal loans or credit cards\"},{\"column\":\"Adds more debt and reduces available home equity, which can be risky if property values fall\"}]},{\"row\":[{\"column\":\"Long repayment period (up to 20 or sometimes 30 years) to help manage costs\"},{\"column\":\"Risk of foreclosing on your primary residence if you can’t keep up with payments\"}]}]'}\n::",{"title":845,"content":846},"Alternatives to a HELOC for buying another property","* **[Cash-out refinance](/refinancing/articles/cash-out/)**: Replace your existing mortgage with a larger one and pocket the difference in cash. You’ll get a lump sum at a fixed rate, but you must accept new loan terms.\n* **[Home equity loan](/home-loans/home-equity/)**: Borrow a lump sum loan against your home’s equity with predictable, fixed payments, though this option is  [less flexible than a HELOC](/home-loans/articles/heloc-vs-home-equity-loan/).\n* **Personal loan:** Access funds without using your home as collateral, though interest rates are typically higher than conventional mortgage rates.\n* **Retirement account loan**: Tap into a 401(k) or similar plan, but keep in mind that this will chip away at your retirement savings.\n* **Savings or investment funds**: Dip into your reserves or liquidate investments to cover costs and avoid new debt.",{"title":848,"content":849},"Steps to apply for a HELOC","1. **Check your fit:** Use our [HELOC calculator](/calculators/heloc/) to estimate how much you could borrow and what your monthly payments might be. Is a HELOC right for your budget?\n2. **Know your numbers:** Double check your credit score, mortgage balance, home value and DTI ratio.\n3. **Research & prequalify:** Compare rates, fees and terms and see if you prequalify with a lender.\n4. **Apply & wait for approval:** Submit your documents and the lender will verify your information. If they approve your application, they’ll set your borrowing limits and terms.\n5. **Close & use your funds:** Sign the [closing papers](/home-buying/articles/closing-documents/), access your funds and borrow only what you need to avoid unnecessary interest charges.",{"title":851,"hideTitle":27,"content":852},"FAQs","\n\n::faq{headline=\"FAQs\" :faqs='[{\"question\":\"Can you use a HELOC for a rental or investment property purchase?\",\"answer\":\"Yes, some lenders allow HELOCs for rental or investment properties, but many reserve them for primary residences.\"},{\"question\":\"What credit score do you need to use a HELOC for another property?\",\"answer\":\"A credit score of 680 or higher is typically required, though lender requirements vary.\"},{\"question\":\"Can a HELOC cover the full purchase price of a second home or investment property?\",\"answer\":\"HELOCs rarely cover the full price of a second property, but this would depend on the purchase price and your home equity amount. Lenders only let you borrow a portion of your home equity and set borrowing limits based on your financial profile.\"},{\"question\":\"What are the risks of using a HELOC for real estate investing?\",\"answer\":\"Your monthly payments could rise if interest rates go up, your home is at risk if you can’t afford payments and borrowing too much can strain your budget.\"}]'}\n::","2025-09-29T13:10:00.000Z","Wondering how to pull equity out of your house to finance a new property? You can use a HELOC for real estate investing, but you need to weigh the financial impact and potential limitations. A HELOC leverages your current home equity to secure a revolving line of credit that you can draw from when needed, up to a set limit. If you want to use home equity financing to scoop up a new property, you should know the ground rules, pros and cons and other ways to access property investment funding.","Can you use a HELOC to buy another property?",[701,807,655],"HELOC",{"introText":859,"body":860,"text":659,"to":660},"Still not sure about using a HELOC for another property?","We can help you sort through the pros, cons and potential next steps.",{"title":862,"description":863},"Can You Use a HELOC to Buy a Second Home? | Citi Mortgage","Learn if you can use a HELOC to buy another property, how lenders view it, pros and cons, and the rules for investment and vacation homes. ","content:articles:home-loans:heloc-to-buy-another-property.json","Heloc To Buy Another Property","articles/home-loans/heloc-to-buy-another-property.json",[823,717,721],{"_path":869,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":870,"l1":655,"linkNav":871,"heroMedia":872,"teaserImage":875,"slug":877,"sections":878,"date":903,"subheadline":904,"headline":905,"dateModified":906,"isFeatured":6,"tags":907,"link":909,"seo":912,"hasSectionNavigation":27,"_id":915,"_type":78,"title":916,"_source":80,"_file":917,"_extension":78,"tagsDetails":918},"/articles/home-loans/what-is-a-mortgage",10,{"introText":658,"text":659,"to":660},{"landscape":873,"portrait":874},"/media/article-what-is-a-mortgage-mobile-768x512.jpg","/media/article-what-is-a-mortgage-desktop-520x638.jpg",{"src":876},"/media/article-what-is-a-mortgage-teaser-500x500.jpg","what-is-a-mortgage",[879,882,885,888,891,894,897,900],{"title":880,"content":881},"How does a mortgage loan work?","You've been scrolling online listings, strolling cool neighborhoods and hitting open houses. Then boom—you see a home that has your name all over it. Like most of us mere mortals, you can't throw down the full payment in cash. This is where a mortgage steps in to help.\n\n::callout{:media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}' title=\"What is a mortgage loan?\" body=\"A mortgage is a specific type of loan that helps you cover the cost of buying property. You'll borrow money from a lender and pay it back over time with interest and, in the meantime, you get to settle in and make the place your own.\"}\n::\n\n### Who are the parties involved in a mortgage?\n\n A mortgage on a house is a pretty hefty loan, likely one of the biggest you’ll ever take out. There’s more to it than simply handing the seller a check. There are safety measures involved to protect all major players, including the:  \n\n**Mortgage lender:** This is the financial institution that lends you money and ultimately determines your interest rate. A bank, like Citi, or a mortgage company will act as your lender. They’ll just need to make sure you’re good for the money—but more on that in a bit. \n\n**Borrower:** You’re the star of this show, and you’re making a promise to pay back the loan over time. It’s a big responsibility, sure, but it’s how most Americans break into homeownership.  \n\n**Co-borrower:** Got a sidekick? A co-borrower is someone who jumps in alongside the primary borrower to apply for the mortgage. This is often a spouse, partner or perhaps a close family member who's willing to share the responsibility of paying back the loan. If the co-borrower has a [solid credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house) and a steady income, it can lead to better loan terms or a bigger loan amount, which may help you afford a pricier home.",{"title":883,"content":884},"What’s included in a mortgage payment?","Probably more than you imagined—a mortgage payment is broken down into a variety of costs, like the:  \n\n* **Principal:** This part goes toward paying back the amount you borrowed. You can chip away at it slowly, like most homeowners do, or make additional payments to reach “paid in full” a bit faster.  \n* **Interest:** Consider this the cost of borrowing money. It's the extra amount you pay the lender for giving you a loan.\n* **[Mortgage insurance premium (MIP)](/home-buying/articles/mortgage-insurance):** This comes into play for certain mortgages, especially with a [Federal Housing Administration (FHA) loan](/home-loans/fha-loan/). It requires an upfront fee and annual payments, typically divided into monthly installments. The cost depends on the loan amount, term and loan-to-value ratio. For some [FHA loans](/home-loans/fha-loan/), MIP lasts for the loan duration, but for others, it ends once 20% home equity is achieved. \n* **[Private mortgage insurance (PMI)](/home-buying/articles/pmi-home-loan):** This may be required if you put less than 20% down on your house. It protects the lender in case you default on your loan.  \n* **Taxes and insurance:** These go into an escrow account (kind of like a safety deposit box) to cover taxes and insurance. With some loans and lenders, you can choose to forgo escrow as part of your monthly mortgage payment and instead pay these fees directly. Now let’s get into specifics: \n\n  * **Property taxes** are tallied based on the assessed value of your home and are used to pay for things like schools, roads and public safety—pretty important. Tax rates can vary a lot depending on the [cost of living](/calculators/cost-of-living) in your area and may increase over time, so be sure to build these costs into your budget. \n  * **[Homeowners insurance](/home-buying/articles/what-is-homeowners-insurance)** is essential. It protects you in case unexpected damage or theft occurs. The cost of this coverage depends on the value of your home, the level of protection you choose and your location. \n  *\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"When choosing a mortgage, consider if there are any penalties for [early repayment](/refinancing/articles/how-to-pay-off-your-mortgage-faster). Many homeowners aim to pay off their mortgage early by making extra payments regularly or when they come into extra money. Always verify that you won't incur extra fees for achieving your financial goals ahead of schedule.\"}\n::",{"title":886,"content":887},"Types of mortgage loans","When it comes to mortgages, there are lots of [loan options](/home-loans/) to choose from. Every type of mortgage comes with pros and cons, so be sure to fully assess your situation when choosing the right one for you. When in doubt, ask your lender for advice.  \n\nHere’s the scoop on a variety of mortgage options:  \n\n### Institutional lender loans\n\nBanks and other private financial entities, such as Citi, offer mortgage programs that feature lenient requirements and lower expenses for [first-time home buyers](/home-buying/articles/first-time-home-buyer). For instance, [Citi's HomeRun® Mortgage](/home-loans/home-run) is a unique program that requires a minimal [down payment ](/home-buying/articles/how-much-down-payment-for-a-house)and helps people from various financial backgrounds purchase their first home. Heads up, this program is available in select markets only and income limitations may apply.\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::\n\n### Conventional conforming loans:\n\nThese loans conform to guidelines set by the Federal Housing Finance Agency (FHFA) and are purchased by Fannie Mae and Freddie Mac. They're popular because they usually cost less than non-conforming loans and work well for buyers with fairly solid financial histories. \n\n### Government-insured mortgages:\n\nSimilar to conventional loans, these mortgages are offered by institutional lenders and are insured or guaranteed by the government. Being government-backed translates to some pretty big benefits for borrowers. Here are some of the popular government-backed loan types:  \n\n* **[FHA loans](/home-loans/fha-loan):** Backed by the FHA, they're great for first-time home buyers or anyone who's had a few financial hiccups. With lower down payments and a more forgiving outlook on credit mishaps, FHA loans feel a bit like a financial wingman. \n* **[VA loans](/home-loans/va-loan):** Brought to you by the U.S. Department of Veterans Affairs, these loans benefit veterans, active service members and surviving spouses. With perks like no down payment (for those with 100% of their loan guarantee benefit) and no private mortgage insurance, they’re a way of saying “thank you” with extra help on the home front. \n* **[USDA loans](/home-loans/usda-loan):** Buyers in rural areas can get a leg up in the mortgage game. With 100% financing, there’s no requirement to save for a down payment. And thanks to reduced mortgage insurance and interest rates, long-term expenses are lower as well.   \n\n### [Jumbo mortgages](/home-loans/jumbo-loan/)\n\nWhen your real estate dreams outgrow that starter house, a [jumbo loan](/home-loans/jumbo-loan/) might be just what you need. These loans exceed government limits and are designed for high-priced, luxury properties.  \n\nNow, there are two types of jumbo loans: non-conforming and agency. Non-conforming jumbo loans are larger, privately backed loans with flexible terms. Agency jumbo loans are also large, but they have government backing and are available only in areas where homes cost more, making them more uniform and generally cheaper. Let’s break it down: \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature \"},{\"value\":\"Non-Conforming Jumbo Loan \"},{\"value\":\"Agency Jumbo Loan \"}]' :rows='[{\"column\":{\"valueOne\":\"Backing \",\"valueTwo\":\"Private lenders (no government backing) \",\"valueThree\":\"Supported by government agencies (Fannie Mae, Freddie Mac) \"}},{\"column\":{\"valueOne\":\"Loan Limits \",\"valueTwo\":\"Exceeds the standard limits set by FHFA \",\"valueThree\":\"Exceeds standard limits, but within higher limits for high-cost areas \"}},{\"column\":{\"valueOne\":\"Guidelines \",\"valueTwo\":\"Vary by lender; more flexible, but stricter qualifications \",\"valueThree\":\"Uniform and strict, adhering to government agency guidelines \"}},{\"column\":{\"valueOne\":\"Interest Rates \",\"valueTwo\":\"Generally higher due to increased risk \",\"valueThree\":\"Typically lower due to government backing \"}},{\"column\":{\"valueOne\":\"Risk and Security \",\"valueTwo\":\"Higher risk for lenders; more stringent borrower qualifications \",\"valueThree\":\"Less risky due to government support; more secure for borrowers \"}},{\"column\":{\"valueOne\":\"Flexibility \",\"valueTwo\":\"More flexibility in loan amounts and underwriting \",\"valueThree\":\"Less flexibility, must meet specific criteria \"}}]'}\n::",{"title":889,"content":890},"How to qualify for a mortgage","So, what does taking out a mortgage mean? Here are some of the stages along the way:\n\n1. **Using our [Affordability Calculator](/calculators/affordability/)**\n\n   Start by crunching some numbers to see how much house you can afford. If you're in tip-top shape, move on to step two. If your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) or savings account need some attention, no sweat. Now you have a clear goal to work toward.\n2. **Getting preapproved**\n\n   This is an important step that shows sellers you mean business and have the financial backing to prove it. In a seller’s market, coming armed with preapproval can help you stand out from the crowd. \n3. **Getting final approval**\n\n   When you’ve found a home and you're ready to [make an offer](/home-buying/articles/how-to-make-an-offer/), your lender will finalize the details of your loan. This is yet another layer of security that shows the seller you’re in it to win it. \n4. **[Closing](/home-buying/articles/closing-on-a-house/) on your loan**\n\n   This is the grand finale where you sign the official papers, handle last-minute details and take hold of those precious house keys.",{"title":892,"content":893},"How are interest rates set by lenders?","Interest rates can be a fickle beast—they may fluctuate often and be swayed by a mix of factors. These include broader market conditions, which are often out of your control, as well as specific aspects of your loan and property. The type of loan you choose, your credit score, your location, the type of property, the purpose of the loan and the loan-to-value ratio all play a role in determining your interest rate.\n\nLuckily, you can set yourself up for success. [Upping that credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house) and decreasing your [debt-to-income ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) can help you score better loan terms. If interest rates happen to drop, that's a bonus, but at least you'll know you've done everything in your power to secure a favorable rate.  \n\nDifferent loan options also come with varying interest rates based on their risk assessment and market position. It’s best to chat with a mortgage specialist to help you find a loan with the best interest rate for your unique financial situation. \n\nCurious to see Citi's latest interest rates? Check out [today’s current rates](/rates/) to compare loan types. Then, you can plug different interest rates into the [Mortgage Calculator](/calculators/monthly/) to see the potential impact on your monthly payment.",{"title":895,"content":896},"Fixed-rate vs. adjustable-rate mortgages","Here are two types of mortgage interest rates you're sure to encounter: \n\n* **[Fixed-rate mortgage:](/home-loans/fixed-rate)** This is the “Steady Eddie” of mortgages, meaning your interest rate will stay the same for the entire life of your loan and your payments will always be predictable. \n* **[Adjustable-rate mortgage (ARM):](/home-loans/adjustable-rate)** An option for those who are comfortable with change, this rate adjusts with the market. Rates may start out low for an initial period but will shift over time. \n\n**Mortgage terms: 15 vs. 30 years** \n\n* **30-year mortgage:** This is the most popular option because it can keep monthly payments low by spreading out expenses over a longer period but will end up costing more in interest.  \n* **15-year mortgage:** By paying more each month, you'll save on interest in the long run. It's not for everyone, but if you've got the financial flexibility, it's worth considering.",{"title":898,"content":899},"Mortgage terms defined","As promised, here are some handy definitions of common real estate terms:\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Term \"},{\"value\":\"Definition \"}]' :rows='[{\"column\":{\"valueOne\":\"Amortization \",\"valueTwo\":\"Consider this your journey to owning your home outright. Each payment you make takes you one step closer to full ownership, unlike rent payments that never come back.  \"}},{\"column\":{\"valueOne\":\"Down Payment \",\"valueTwo\":\"This upfront chunk of cash helps you secure a loan. It’s where saving pays off because the bigger the down payment, the smaller the loan. Not quite there yet? Explore FHA loans or ask your lender for ideas. \"}},{\"column\":{\"valueOne\":\"Escrow \",\"valueTwo\":\"These special accounts hang on to your tax and insurance funds so they’re safe until needed. It’s much easier than saving money you'd be tempted to spend––and that’s the point. \"}},{\"column\":{\"valueOne\":\"Interest Rate \",\"valueTwo\":\"Nobody’s favorite fee, interest is the percentage of extra money you’ll have to pay in order to borrow from the bank. Yeah, it's a bit of a bummer, but interest payments are part and parcel of a mortgage. \"}},{\"column\":{\"valueOne\":\"Mortgage Note \",\"valueTwo\":\"These important (and very dry) contracts spell out all the details of your loan. While you may not understand every last word, be sure to read it carefully so you know exactly what you’re signing up for. If you get tripped up on legal jargon, your lender will be happy to translate. \"}},{\"column\":{\"valueOne\":\"Loan Servicer \",\"valueTwo\":\"You’ll know them on a first-name basis because once your loan is finalized, they’ll be your primary point of contact. They’ll collect your monthly payments, manage your escrow account and answer any questions you might have. \"}}]'}\n::\n\nLearning everything there is to know about home buying is a lot, but you’re never really alone. From your local [real estate agent](/home-buying/articles/what-is-a-real-estate-agent) to the lender you choose to work with, you’ll be surrounded by support from start to finish. Now get out there and stake your claim.",{"title":901,"content":902,"hideTitle":27},"Mortgage FAQs","::faq{:faqs='[{\"question\":\"What is a mortgage?\",\"answer\":\"A mortgage is a loan that helps you buy a home. It’s a partnership between you and a lender—you get the keys to your dream home, and in return, you agree to pay back the loan over time, usually in monthly payments. It’s how most people become homeowners.\"},{\"question\":\"How does a mortgage work?\",\"answer\":\"When you take out a mortgage, you borrow money from a lender to purchase a home and then pay it back bit by bit—typically over 15 to 30 years. Each payment is split between the loan principal (the amount you borrowed) and the interest, which is what the lender charges for loaning you the money.\"},{\"question\":\"What are the main parts of a mortgage payment?\",\"answer\":\"Your mortgage payment usually includes four parts, often called PITI: principal, interest, taxes and insurance. The principal is the amount you borrowed. The interest is what you pay the lender for borrowing that money. Property taxes are paid to your local government. Lastly, you’ll owe insurance, which can include homeowners insurance and sometimes mortgage insurance if your down payment is below 20%. \"},{\"question\":\"What types of mortgage loans are available?\",\"answer\":\"There are several types of mortgage loans that suit different financial situations. Conventional loans are popular for borrowers with strong credit and stable incomes. Then you have government-backed options with more lenient requirements, like FHA, VA, and USDA loans. FHA loans are often ideal for first-time buyers with lower credits scores or smaller down payments. VA loans offer valuable benefits for veterans and active-duty service members, while USDA loans help buyers score homes in eligible rural areas. You can also choose between fixed-rate mortgages, where your interest stays the same, and adjustable-rate mortgages (ARMs), which start with a lower rate that can change over time based on market conditions.\"},{\"question\":\"What credit score is needed to get a mortgage?\",\"answer\":\"Credit requirements vary by loan type, but generally, a score of 620 is the minimum for conventional loans. Government-backed loans like FHA loans may accept lower scores—sometimes as low as 500. Keep in mind that the higher your credit score, the better your interest rate is likely to be, so it’s worth checking your credit score early and taking steps to improve it, if needed.\"},{\"question\":\"How much do I need for a down payment on a mortgage?\",\"answer\":\"Down payment requirements vary by loan type. With a conventional loan you may be able to put down as little as 3% to 5%. FHA loans typically require 3.5%, and VA and USDA loans may offer 0% down options. While putting 20% down can help you avoid paying for private mortgage insurance, many buyers successfully purchase homes with smaller down payments. \"},{\"question\":\"What’s the difference between prequalification and preapproval?\",\"answer\":\"Prequalification is a quick estimate of how much you might be able to borrow based on basic financial information you provide, while preapproval involves a lender reviewing your financial stats in detail to formulate a specific loan amount. Preapproval is more official and carries more weight with sellers, showing you’re ready to buy.\"},{\"question\":\"Can I pay off my mortgage early?\",\"answer\":\"Yes, in many cases you can pay off your mortgage early without penalty, and doing so can save you money on interest over time. Just be sure to check with your lender to confirm there are no prepayment penalties. If allowed, making extra payments can be a smart strategy as long as it works for your budget. \"}]' headline=\"Mortgage FAQs\"}\n::","2025-06-18T09:18:00.000Z","If you're ready for a place to call home, you're in the perfect spot to learn how mortgages work. While a mortgage is similar to other types of loans, it’s designed specifically to help you step onto the property ladder and begin your homeownership journey. Let’s start by understanding the mortgage basics.","What is a mortgage? Understanding home loans","2025-06-26T09:45:00.000Z",[655,908,701],"first-time-buyer",{"introText":910,"text":659,"to":660,"body":911},"Ready to find the right mortgage for you?","Let’s take the next step toward your new home.",{"title":913,"description":914},"What Is a Mortgage? How Home Loans Work | Citi Mortgage","Learn what a mortgage is, how it works, what’s included in your payment, and the types of home loans available to buyers.","content:articles:home-loans:what-is-a-mortgage.json","What Is A Mortgage","articles/home-loans/what-is-a-mortgage.json",[919,717,721],{"label":920,"slug":908,"seo":921},"First Time Buyer",{"description":922},"Learn more about first time buyer with helpful articles, tools, and guides to support your homeownership journey.",{"_path":924,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":925,"l1":655,"linkNav":926,"heroMedia":928,"teaserImage":931,"slug":933,"disclosure":99,"sections":934,"date":953,"subheadline":954,"headline":955,"isFeatured":6,"tags":956,"link":957,"seo":961,"hasSectionNavigation":27,"_id":964,"_type":78,"title":965,"_source":80,"_file":966,"_extension":78,"tagsDetails":967},"/articles/home-loans/15-vs-30-year-mortgage",7,{"introText":658,"text":659,"to":660,"ariaLabel":927},"N/A",{"landscape":929,"portrait":930},"/media/article-15v30-year-mortgage-mobile-768x512.jpg","/media/article-15v30-year-mortgage-desktop-520x638.jpg",{"src":932},"/media/article-15v30-year-mortgage-teaser-500x500.jpg","15-vs-30-year-mortgage",[935,938,941,944,947,950],{"title":936,"content":937},"What’s the difference between a 15 year and a 30 year mortgage?","It might seem straightforward, but the loan term is just one part of the bigger picture. The real impact lies in how each loan affects your monthly payment, interest rate and the total amount you’ll pay over the life of the loan. A 30 year vs. 15 year mortgage comparison can help you better understand how much interest you’ll pay, how quickly you’ll build equity and what you can afford based on your income and financial goals.  \n\n***Which is better: 15 year mortgage vs. 30 year mortgage?*** \n\nGood question. The answer to whether a 15 year mortgage or a 30 year mortgage is better depends on your individual situation. A shorter loan term means you’ll pay less in interest and own your home sooner—but it also comes with higher monthly payments. If you're focused on affordability and flexibility, a 30 year loan may offer more breathing room. Consider your personal finances, long-term goals and how each option fits into your broader real estate plan. \n\n### Loan term length\n\nJust like the names suggest, a 15 year mortgage is paid off in 15 years, and a 30-year mortgage takes—you guessed it—30. The 30 year option is more popular with home buyers because stretching the payments out makes them easier to manage month to month. But with a 15 year mortgage, you’ll own your home outright a lot faster and build equity a lot quicker along the way. \n\n### Monthly payments \n\nFor many people, this is the number that counts most. One of the easiest ways to see how these two loan options stack up is through a monthly payment comparison. With a 15 year mortgage, your payments are higher because you’re knocking out the loan in half the time. The upside? More of your money goes straight toward the principal instead of interest. A 30 year mortgage, in contrast, comes with lower monthly payments, which can give you more breathing room in your budget or make it easier to qualify for a mortgage. \n\n### Total interest paid \n\nIf you didn’t account for this number, don’t worry—you’re not alone. A lot of people overlook total interest paid. So, while a 30 year mortgage might come with a smaller monthly payment, it’ll cost you more in the long run. Why? Because you’re stretching those payments out over three decades and often at a higher interest rate. On the flip side, a 15 year mortgage usually comes with a lower interest rate and much less total interest. You’re paying more each month, but you’re saving big overall.",{"title":939,"content":940},"Pros and cons of a 15 year mortgage","As they say, sometimes less is more. If you’ve got a bit of wiggle room in your budget, whether from a steady high income or a surprise windfall, a 15 year mortgage could be a smart way to make that extra cash work harder. It comes with some solid perks, but there are a few trade-offs to consider too. Let’s take a look at a few key factors. \n\n### Lower interest costs \n\nIf saving six figures in interest sounds good to you, a 15 year mortgage might be worth a closer look. These loans typically come with lower rates than 30 year options, and since you’re paying interest over a shorter period, the total cost of borrowing is much lower. For example, on a $400,000 loan with 20% down, a 15 year mortgage could save you over $250,000 in interest compared to a 30 year option (based on interest rates as of May 2025). \n\n### Faster payoff \n\nPaying off your home in half the time doesn’t just sound good—it can fast-track your path to financial freedom. You’ll build equity quicker, which opens the door to more flexibility down the road through cash-out options like a [HELOC](/home-loans/heloc/). When the time is right, you can then tap into your home’s value for renovations, big purchases or your next big investment move. \n\n::quote{icon=\"Mortgage\" quote=\"Paying off your home in half the time doesn’t just sound good—it can fast-track your path to financial freedom.\"}\n::\n\n### Higher monthly payments \n\nIf you’re juggling student loans, car payments or childcare costs, a 15 year fixed rate mortgage might feel out of reach. That’s because the monthly payment is significantly higher due to the shortened mortgage term. While you’ll pay off your home faster and save on interest over the life of the loan, the upfront costs can strain your monthly budget. \n\nSince your payments go toward both principal and interest, compressing repayment into a shorter window means writing bigger checks each month. If your personal finances are tight or your income fluctuates, it might be harder to qualify for a 15 year loan or sustain those higher monthly payments in the long term. A mortgage calculator can help you compare costs and see which option works better for your situation.  \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Factor\"},{\"value\":\"15-Year Mortgage\"},{\"value\":\"30-Year Mortgage\"}]' :rows='[{\"column\":{\"valueOne\":\"Loan term\",\"valueTwo\":\"15 years\",\"valueThree\":\"30 years\"}},{\"column\":{\"valueOne\":\"Monthly payments\",\"valueTwo\":\"Higher\",\"valueThree\":\"Lower\"}},{\"column\":{\"valueOne\":\"Interest rates\",\"valueTwo\":\"Slightly lower\",\"valueThree\":\"Slightly higher\"}},{\"column\":{\"valueOne\":\"Total interest paid\",\"valueTwo\":\"Less over time\",\"valueThree\":\"More over time\"}},{\"column\":{\"valueOne\":\"Equity build-up\",\"valueTwo\":\"Faster\",\"valueThree\":\"Slower\"}}]'}\n::",{"title":942,"content":943},"Pros and cons of a 30-year mortgage","For many U.S. homeowners, the 30 year loan is still the standard—and for good reason. Spreading payments across 30 years results in lower monthly payments, freeing up cash for other goals like retirement, education or investments in real estate or other products and services. \n\nHowever, this flexibility comes with trade-offs. You’ll pay more in interest payments over the life of the loan, and it’ll take longer to build equity. It’s important to weigh the short-term affordability against the long-term cost. \n\n###  Lower monthly payments \n\nThe biggest perk of a 30 year mortgage? Lower monthly payments. Stretching the loan over a longer period makes each payment easier to handle, potentially helping you [afford a home](/calculators/affordability/) that wouldn’t be feasible with a shorter loan term. \n\n::tip{icon=\"Bulb\" text=\"Just one extra payment per year on a 30 year mortgage can cut about 4–5 years off your loan. Just make sure your lender applies that extra payment to the principal, not future interest or upcoming installments.\" title=\"Pro Tip\"}\n::\n\n### \nFlexibility and budgeting \n\nIf having more flexibility in your budget matters to you, a 30 year term has the edge. With lower monthly payments, you’ll have more money to put toward retirement, invest in your future or simply cover everyday expenses like groceries and gas. Plus, because the monthly payment is lower, it’s often easier to qualify for a 30 year vs. 15 year mortgage. \n\n### More interest paid over time \n\nA 30-year mortgage can ease the monthly pinch, but it comes at a long-term cost. Even with a slightly higher interest rate, paying interest for twice as long can add up to hundreds of thousands of dollars over the life of the loan. You’re essentially trading short-term affordability for long-term cost.",{"title":945,"content":946},"Which one should you choose?","Just like choosing the right home, there’s no one-size-fits-all answer here. But understanding how each loan option fits into your larger financial picture can help you decide with confidence. Let’s walk through a few considerations. \n\n### Factors to consider \n\n* **Monthly budget:** Can you afford higher payments without sacrificing savings or other goals? If not, a 30 year loan may be the safer bet. \n* **Income stability:** If your income fluctuates, the lower, more predictable payments of a 30 year loan offer more security. \n* **Financial goals:** Want to build equity fast or be debt-free sooner? A 15 year mortgage gets you there quicker. \n* **Qualification:** 15 year loans typically require higher income and lower debt, making them tougher to qualify for. \n* **Flexibility:** A 30 year mortgage gives you wiggle room, and you can often pay extra to shorten the term if your budget allows. \n\n### Example scenarios: Which works best? \n\n* **A young couple buying their first home:** If you’re a [first-time home buyer](/home-buying/articles/first-time-home-buyer/) deciding between a long-term vs. short-term loan, a 30 year mortgage is usually the better fit. It keeps monthly payments lower, which frees up cash for other priorities like car payments, student loans or handling unexpected homeownership costs. Plus, the flexibility helps when you’re still growing your income and figuring out long-term goals. \n* **A mid-career professional with a high income:** A 15 year mortgage could be a smart move here. With a steady, higher income, you’re well-equipped to handle the larger payments. This option helps you build equity faster, pay less in interest and own your home outright sooner. It’s a solid play if you’re focused on long-term wealth building. \n* **A couple nearing retirement:** It depends on your finances, but a 30 year mortgage often offers more breathing room. The lower monthly payments can help stabilize your budget, especially on a fixed income. However, if being mortgage-free by retirement is a priority and you can swing it, a 15 year term might be worth considering.",{"title":948,"hideTitle":27,"content":949},"15 vs. 30 year mortgage frequently asked questions","::faq{headline=\"15 vs. 30 year mortgage FAQs\" :faqs='[{\"question\":\"Can I switch from a 30 year to a 15 year mortgage later?\",\"answer\":\"Yes, you can switch from a 30 year to a 15 year mortgage—most often by refinancing. Refinancing lets you swap your current loan for one with a shorter term, a potentially lower rate and a faster path to full homeownership. It can be a smart move if your income has increased or you’re looking to cut down on long-term interest costs. Not ready to refi? You can still get ahead by making extra payments toward your principal. Just be sure to check with your lender first—some loans have prepayment penalties or specific instructions for how to apply extra payments. \"},{\"question\":\"Does a shorter term always mean better savings?\",\"answer\":\"Typically, a 15 year mortgage can save you a lot in interest and help you build equity sooner. But if you compare mortgage terms, you’ll see that the trade-off is higher monthly payments, which can tighten your budget and leave less room for other priorities like saving for retirement or covering unexpected expenses. If the faster mortgage payoff timeline puts too much strain on your finances, the long-term savings might not be worth the short-term stress.\"}]'}\n::",{"title":951,"content":952},"Ready to explore your options?","It’s not just the term to consider—it’s the type of loan, too. Take time to explore your [options](/home-loans/) to find the one that fits your needs and financial goals best.","2025-05-30T11:25:00.000Z","You’ve been searching for your dream home. You’ve checked out school districts, calculated commute times and fine-tuned your monthly budget. Now, you’re down to one big decision: 15 vs. 30 year mortgage. Whether you want to save on interest  tover the life of the loan or prefer smaller monthly payments, the right loan term can help you reach your goals. Let's compare 15 year vs. 30 year mortgage options to help you choose which works best for your budget and long-term plans.","15 vs. 30 year mortgage: Which loan term is right for you?",[655,702],{"introText":958,"body":959,"text":659,"to":660,"ariaLabel":960},"Need help choosing between a 15 year and a 30 year mortgage?","We’re here to help.","n/a",{"title":962,"description":963},"15 vs 30 Year Mortgage: Big Difference | Citi Mortgage","Choosing between a 15- or 30-year mortgage? Compare the pros, cons, costs, and savings of each loan term to find out which is right for you. ","content:articles:home-loans:15-vs-30-year-mortgage.json","15 Vs 30 Year Mortgage","articles/home-loans/15-vs-30-year-mortgage.json",[713,721],{"_path":969,"_dir":655,"_draft":6,"_partial":6,"_locale":7,"readTime":925,"l1":655,"linkNav":970,"heroMedia":971,"teaserImage":974,"outro":7,"slug":976,"sections":977,"date":994,"subheadline":995,"headline":996,"dateModified":997,"isFeatured":6,"tags":998,"link":1000,"seo":1003,"hasSectionNavigation":27,"_id":1006,"_type":78,"title":1004,"_source":80,"_file":1007,"_extension":78,"tagsDetails":1008},"/articles/home-loans/how-to-buy-a-house-with-bad-credit",{"introText":658,"text":659,"to":660},{"landscape":972,"portrait":973},"/media/article-how-to-buy-a-house-with-bad-credit_-mobile-768x512.jpg","/media/article-how-to-buy-a-house-with-bad-credit_-desktop-520x638.jpg",{"src":975},"/media/article-how-to-buy-a-house-with-bad-credit_-teaser-500x500.jpg","how-to-buy-a-house-with-bad-credit",[978,979,982,985,988,991],{"title":669,"hideTitle":27,"content":670},{"title":980,"content":981},"What’s considered a bad credit score?","Before we dive into the details on what counts as bad credit, let’s break down what a credit score actually is. To put it simply, it helps show how likely you are to repay a loan on time. It’s based on things like your track record of making payments and if you have any outstanding balances. It gives lenders an idea of how risky it is to lend you money—high scores earn high marks for trust, while lower scores can make lenders wary.\n\nNow, it’s time to talk bad credit. Your credit score is three digits, and it’s usually between 300 and 850. Anything under 580 is considered poor and can make it harder—but not impossible—to get the loan you’re hoping for. Late payments, defaults and carrying too much debt are some of the usual factors behind a lower number.\n\n**CREDIT SCORE GUIDE**\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Range \"},{\"value\":\"Guidance\"}]' :rows='[{\"column\":{\"valueOne\":\"No credit score\",\"valueTwo\":\"Having no credit means lacking a credit history—it does not mean you have poor credit. Home buyers without a credit score can still obtain a mortgage. Lenders might evaluate creditworthiness through alternative means like reviewing payment histories for rent and utilities.\"}},{\"column\":{\"valueOne\":\"Poor (579 & below)\",\"valueTwo\":\"If your score falls below 580, it could mean an uphill climb, but there are options out there to help make it happen.\"}},{\"column\":{\"valueOne\":\"Fair (580 to 669)\",\"valueTwo\":\"This range falls into fair territory. You can still qualify for a mortgage, but be ready for higher interest rates and less favorable terms.\"}},{\"column\":{\"valueOne\":\"Good (670 to 739)\",\"valueTwo\":\"Welcome to the green zone. A score here tells lenders you’ve got a solid credit history, and you’re more likely to snag a loan with good terms.\"}},{\"column\":{\"valueOne\":\"Very good (740 to 799)\",\"valueTwo\":\"This puts you in a prime spot to land strong terms and lower interest rates.\"}},{\"column\":{\"valueOne\":\"Excellent (800 or above)\",\"valueTwo\":\"This is the top tier, and it opens the door to the most favorable terms and interest rates.\"}}]'}\n::",{"title":983,"content":984},"Can you buy a house with bad credit?","A low credit score doesn’t automatically disqualify you from homeownership, but buying a house with bad credit can be a challenge. Lenders use your credit score to figure out how much they’re willing to lend you and at what interest rate. A lower score could mean they’ll be more cautious about giving you a loan, or that they’ll leave you dealing with higher interest rates. Even a small bump in rates can snowball over the life of a loan.\n\nIf you have bad credit, you might even be asked for a [down payment](/home-buying/articles/how-much-down-payment-for-a-house) of 20% or more to help offset the risk. That’s a lot of cash, especially when you’re just starting out and trying to save for your [first home](/home-buying/articles/first-time-home-buyer).\n\nBuying a house with bad credit can be hard, but don’t get discouraged. With the right moves, like paying off debts and looking into good home loans for low credit scores, you can turn your dream of buying into a reality.\n\n::tip{icon=\"Mortgage\" text=\"Home buyers without a credit score can still obtain a mortgage. Lenders might evaluate creditworthiness through alternative means like reviewing payment histories for rent and utilities.\" title=\"No credit score? \"}\n::",{"title":986,"content":987},"Home loans for people with poor credit scores","One way to buy a house when you have bad credit is to take advantage of mortgage loan programs designed to help people with less-than-perfect credit scores. They typically have more relaxed loan requirements, making it a little easier to get approved. Let’s explore the [types of loans](/home-loans/) you might see in your search:\n\n::cta-card-grid{:cards='[{\"ctaType\":\"arrow\",\"headline\":\"FHA Loans\",\"body\":\"FHA loans are popular mortgages for first-time buyers, offering more lenient credit requirements and lower down payments. They generally allow a score as low as 580 with a 3.5% down payment. \\n\",\"ctaText\":\"\",\"link\":\"/home-loans/fha-loan\"},{\"ctaType\":\"arrow\",\"headline\":\"VA Loans\",\"body\":\"VA loans are great for buyers because they generally don’t ask for a down payment and have flexible credit score requirements. These loans are guaranteed for U.S. military service members, including those on active duty, veterans and surviving spouses.\",\"link\":\"/home-loans/va-loan\"}]'}\n::",{"title":989,"content":990},"Options for buyers who can’t get a bad credit mortgage loan","If you’re struggling to get the loan you’re looking for, remember, your credit score isn’t set in stone. By taking steps to improve it, you can show lenders you’re a safer bet, and that can help you land a [mortgage](/home-loans/articles/what-is-a-mortgage) with a better rate. Let’s look at some of your options if you can’t get a bad credit mortgage loan:\n\n1. ### Up your available credit\n\n   Bumping up your available credit can give your credit score a boost by bringing down your credit utilization ratio, or how much of your credit you’re actually using. Credit bureaus like to see that number stay under 30%. Make sure to check all three credit bureaus, Equifax®, Experian® and TransUnion®, for a full picture of your score.\n2. ### Freeze your credit\n\n   This puts you in control of who gets to access your credit and when. When applying for a credit card, car, loan or mortgage, you can temporarily unfreeze and re-freeze as you need to.\n3. ### Pay for deletions\n\n   Paying for deletions is all about getting negative marks off your credit report for a fee. Negotiating with creditors and collection agencies can take some effort, but getting rid of late payments or collection accounts can really push your credit score in the right direction.\n4. ### Steer clear of hard credit inquiries\n\n   Hard credit inquiries can ding your score, so it’s smart to keep them in check when you’re working to raise your credit score. Examples of hard enquiries include applying for credit cards, leasing a car and applying for other big loans such as personal loans.\n5. ### Dispute incorrect information\n\n   If your credit report contains errors, disputing them is crucial. Incorrect information can drag down your credit score significantly. By ensuring all information is accurate, you can maintain a fair score that truly reflects your creditworthiness.\n6. ### Negotiate settlements of collections or past due accounts directly with creditors\n\n   By settling these debts, you can potentially have them marked as paid or settled on your credit report, which is more favorable than having outstanding collections.\n7. ### Pay off credit cards using the snowball method\n\n   The snowball method involves paying off your smallest debts first and gradually working your way up to the larger ones. This can help you build momentum and keep you motivated as you see debts being fully paid off, which can also improve your credit score.\n8. ### Open secured credit cards\n\n   Secured credit cards are one tool for rebuilding credit. They require a cash deposit that serves as your credit limit. Because the credit card issuer has less risk, they are more willing to provide these cards to individuals with bad credit or no credit history.\n\n   Luckily, buying a house with bad credit is possible, and one way to begin is by boosting your credit score. It doesn't happen overnight, but it’s a worthwhile investment that can make a difference in making your dream of owning a home a reality.",{"title":992,"hideTitle":27,"content":993},"Bad credit FAQs","::faq{headline=\"Bad credit FAQs\" :faqs='[{\"question\":\"What is considered a bad credit score?\",\"answer\":\"Anything below 580 lands you in the poor credit zone. In general, if you’re trying to buy a house, a good credit score to shoot for is 620 or higher.\"},{\"question\":\"Will I pay more for mortgage insurance with bad credit?\",\"answer\":\"There’s a good chance you will. Because lenders see lower credit scores as a higher risk, it usually translates to steeper mortgage insurance premiums.\"}]'}\n::","2024-09-11T11:28:00.000Z","When you’re looking for a home loan, keeping up with your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house) is key. And while a higher number is always the goal, here’s some good news: a less-than-ideal credit score doesn’t slam the door on your dream of homeownership. Bad credit can be a hurdle, but it’s one you can clear with patience and the right strategy. Let’s take a look at what you need to know.","Buying a house with bad credit: a guide to your home loan options","2026-04-23T10:25:00.000Z",[999,701,808],"credit-score",{"introText":1001,"text":659,"to":660,"body":1002},"Need some guidance on the home buying front?","We're happy to help.",{"title":1004,"description":1005},"How To Buy A House With Bad Credit","Learn how to buy a house with bad credit. Explore mortgage options and home loans for low credit scores, including bad credit mortgages for first-time buyers.","content:articles:home-loans:how-to-buy-a-house-with-bad-credit.json","articles/home-loans/how-to-buy-a-house-with-bad-credit.json",[819,717,1009],{"label":1010,"slug":999,"seo":1011},"Credit Score",{"description":1012},"Understand how your credit score impacts your ability to qualify for a home loan and how to improve it.",1782151360340]