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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":174},{"title":7,"description":102},"Key insights:",{"type":104,"children":105},"root",[106,117,151,164,169],{"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",{},[121,136,141,146],{"type":107,"tag":122,"props":123,"children":124},"li",{},[125,127,134],{"type":116,"value":126},"Your first ",{"type":107,"tag":128,"props":129,"children":131},"a",{"href":130},"/home-loans/articles/what-is-a-mortgage/",[132],{"type":116,"value":133},"mortgage",{"type":116,"value":135}," payment is usually due on the first day of the month after your first full month in the home",{"type":107,"tag":122,"props":137,"children":138},{},[139],{"type":116,"value":140},"There’s often a gap between closing and your first payment because of prepaid interest",{"type":107,"tag":122,"props":142,"children":143},{},[144],{"type":116,"value":145},"Your first payment may include principal, interest and escrow costs like property taxes and homeowners\ninsurance",{"type":107,"tag":122,"props":147,"children":148},{},[149],{"type":116,"value":150},"You can confirm your exact due date in your closing disclosure, loan documents or through your loan servicer",{"type":107,"tag":108,"props":152,"children":153},{},[154,156,162],{"type":116,"value":155},"You’ve signed the paperwork, received the keys and stepped into homeownership. So when is your first mortgage payment due? Many new homeowners ",{"type":107,"tag":128,"props":157,"children":159},{"href":158},"/home-buying/articles/closing-on-a-house/",[160],{"type":116,"value":161},"close on their home",{"type":116,"value":163}," and then—nothing happens right away. No immediate bill, no instant withdrawal, just a bit of quiet that can feel surprisingly uncertain.",{"type":107,"tag":108,"props":165,"children":166},{},[167],{"type":116,"value":168},"If you’re thinking, “Shouldn’t I be paying something already?” that’s completely normal. The timing of the first mortgage payment often catches people off guard, especially after the fast pace of closing. Shouldn’t you start paying as soon as the house is officially yours?",{"type":107,"tag":108,"props":170,"children":171},{},[172],{"type":116,"value":173},"Mortgages don’t quite work like that. There’s a built-in delay that’s part of how interest is calculated and scheduled. Once you understand why that gap exists, the timeline starts to make more sense, and you can typically move forward feeling confident about what to expect next.",{"title":7,"searchDepth":175,"depth":175,"links":176},2,[],{"data":178,"body":180,"excerpt":-1,"toc":198},{"title":7,"description":179},"In most cases, your first mortgage payment is due on the first day of the month after your first full month in the home.",{"type":104,"children":181},[182,186,193],{"type":107,"tag":108,"props":183,"children":184},{},[185],{"type":116,"value":179},{"type":107,"tag":187,"props":188,"children":192},"callout",{":media":189,"body":190,"title":191},"{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}","If you close on June 15, your first full month is July, so your first payment is due August 1. If you close on June 30, your first full month is still July, so your first payment is also due August 1.","First mortgage payment timing",[],{"type":107,"tag":108,"props":194,"children":195},{},[196],{"type":116,"value":197},"That gap can feel a little strange at first, especially if you close in the middle of the month and wait\nmore than four weeks for your first bill. But nothing’s gone wrong. That pause is completely normal and just part of how mortgage payments are set.",{"title":7,"searchDepth":175,"depth":175,"links":199},[],{"data":201,"body":203,"excerpt":-1,"toc":237},{"title":7,"description":202},"When you close on your home, you’ll usually pay something called prepaid interest. This is the interest that builds up from the day you close through the end of that month.",{"type":104,"children":204},[205,209,214,219,232],{"type":107,"tag":108,"props":206,"children":207},{},[208],{"type":116,"value":202},{"type":107,"tag":108,"props":210,"children":211},{},[212],{"type":116,"value":213},"In simple terms, you’re covering those first few days (or weeks) of interest upfront, rather than rolling them into your first monthly payment. That way, when your regular payment schedule begins, your interest lines up with a full month.",{"type":107,"tag":108,"props":215,"children":216},{},[217],{"type":116,"value":218},"Your closing date plays a big role in how much prepaid interest you’ll pay.",{"type":107,"tag":118,"props":220,"children":221},{},[222,227],{"type":107,"tag":122,"props":223,"children":224},{},[225],{"type":116,"value":226},"Closing earlier in the month means more days of interest upfront, but a longer gap before your first mortgage payment",{"type":107,"tag":122,"props":228,"children":229},{},[230],{"type":116,"value":231},"Closing later in the month means fewer days of interest upfront, but your first mortgage payment will come around sooner",{"type":107,"tag":108,"props":233,"children":234},{},[235],{"type":116,"value":236},"Neither option is better or worse. 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That can happen because of timing differences or how escrow is initially set up. Once that first payment is out of the way, your monthly amount will usually settle into a more consistent pattern, helping to make it easier to plan and budget going forward.",{"title":7,"searchDepth":175,"depth":175,"links":327},[],{"data":329,"body":331,"excerpt":-1,"toc":373},{"title":7,"description":330},"While this general timeline gives you a good idea of what to expect, your exact payment date comes down to the details of your specific loan.",{"type":104,"children":332},[333,337,342,368],{"type":107,"tag":108,"props":334,"children":335},{},[336],{"type":116,"value":330},{"type":107,"tag":108,"props":338,"children":339},{},[340],{"type":116,"value":341},"And luckily, you don’t have to guess. 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Mortgage documents can feel like a lot to take in all at once, and taking a moment to confirm the details can give you real peace of mind.",{"title":7,"searchDepth":175,"depth":175,"links":374},[],{"data":376,"body":378,"excerpt":-1,"toc":412},{"title":7,"description":377},"Once your payment schedule begins, staying on track becomes part of your routine, but there’s usually a bit of flexibility built in.",{"type":104,"children":379},[380,384,389,394,407],{"type":107,"tag":108,"props":381,"children":382},{},[383],{"type":116,"value":377},{"type":107,"tag":108,"props":385,"children":386},{},[387],{"type":116,"value":388},"Most lenders offer a grace period, often around 15 days after your due date. During\nthis time, you can still make your payment without a late fee.",{"type":107,"tag":108,"props":390,"children":391},{},[392],{"type":116,"value":393},"If a payment is made after that window:",{"type":107,"tag":118,"props":395,"children":396},{},[397,402],{"type":107,"tag":122,"props":398,"children":399},{},[400],{"type":116,"value":401},"You may be charged a late fee",{"type":107,"tag":122,"props":403,"children":404},{},[405],{"type":116,"value":406},"It could begin to affect your credit score if delays continue",{"type":107,"tag":108,"props":408,"children":409},{},[410],{"type":116,"value":411},"On the flip side, paying early is generally fine. In some cases, it may even slightly reduce the interest that builds up, depending on how your lender applies payments.",{"title":7,"searchDepth":175,"depth":175,"links":413},[],{"data":415,"body":417,"excerpt":-1,"toc":451},{"title":7,"description":416},"You’ll generally have a small gap between closing and your first mortgage payment, but\ndon’t let it catch you off guard. A little preparation can help you feel more\nin control from day one.",{"type":104,"children":418},[419,423,428,446],{"type":107,"tag":108,"props":420,"children":421},{},[422],{"type":116,"value":416},{"type":107,"tag":108,"props":424,"children":425},{},[426],{"type":116,"value":427},"There are a few things you can do to help prepare for your first payment:",{"type":107,"tag":118,"props":429,"children":430},{},[431,436,441],{"type":107,"tag":122,"props":432,"children":433},{},[434],{"type":116,"value":435},"Confirm your loan servicer details so you know exactly where and how to send your payment",{"type":107,"tag":122,"props":437,"children":438},{},[439],{"type":116,"value":440},"Set up autopay so you typically don’t have to worry about missing a due date",{"type":107,"tag":122,"props":442,"children":443},{},[444],{"type":116,"value":445},"Plan for your first payment amount, especially if it’s slightly higher than usual",{"type":107,"tag":108,"props":447,"children":448},{},[449],{"type":116,"value":450},"Even small steps can help you start off on the right foot and avoid any last-minute stress.",{"title":7,"searchDepth":175,"depth":175,"links":452},[],{"data":454,"body":456,"excerpt":-1,"toc":467},{"title":7,"description":455},"Your first mortgage payment might feel like one more unknown in an already busy process. But once you understand the timing, it generally becomes much easier to navigate.",{"type":104,"children":457},[458,462],{"type":107,"tag":108,"props":459,"children":460},{},[461],{"type":116,"value":455},{"type":107,"tag":108,"props":463,"children":464},{},[465],{"type":116,"value":466},"That initial gap after closing is completely normal. By knowing when your payment is due, understanding what it includes and taking a few simple steps to prepare, you’re helping to set yourself up for a steady, confident start as a homeowner.",{"title":7,"searchDepth":175,"depth":175,"links":468},[],{"data":470,"body":471,"excerpt":-1,"toc":479},{"title":7,"description":7},{"type":104,"children":472},[473],{"type":107,"tag":474,"props":475,"children":478},"faq",{":faqs":476,"headline":477},"[{\"question\":\"When is my first mortgage payment due after closing?\",\"answer\":\"Your first payment is usually due on the first day of the month after your first full month in the home. 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Power 2025 award information, visit ",{"type":107,"tag":128,"props":513,"children":517},{"href":514,"rel":515},"https://www.jdpower.com/business/awards",[516],"nofollow",[518],{"type":116,"value":519},"jdpower.com/awards",{"type":116,"value":521},".",{"title":7,"searchDepth":175,"depth":175,"links":523},[],{"_path":525,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":99,"content":526,"_id":527,"_type":78,"title":528,"_source":80,"_file":529,"_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":531,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"content":532,"slug":533,"_id":534,"_type":78,"title":535,"_source":80,"_file":536,"_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":538,"body":540,"toc":551},{"title":7,"description":539},"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":557},[558,569],{"type":107,"tag":108,"props":559,"children":560},{},[561,567],{"type":107,"tag":562,"props":563,"children":564},"sup",{},[565],{"type":116,"value":566},"†",{"type":116,"value":568},"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":570,"children":571},{},[572],{"type":107,"tag":573,"props":574,"children":576},"span",{"lang":575},"es",[577],{"type":116,"value":578},"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":175,"depth":175,"links":580},[],{"data":582,"body":583,"excerpt":-1,"toc":589},{"title":7,"description":190},{"type":104,"children":584},[585],{"type":107,"tag":108,"props":586,"children":587},{},[588],{"type":116,"value":190},{"title":7,"searchDepth":175,"depth":175,"links":590},[],[592,654,705,769,824,874,915,967,1014,1066,1112],{"_path":593,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":595,"l1":594,"linkNav":596,"heroMedia":600,"teaserImage":603,"slug":605,"sections":606,"hideFooterJdPower":6,"date":631,"subheadline":632,"headline":633,"isFeatured":6,"tags":634,"link":636,"seo":639,"hasSectionNavigation":27,"_id":642,"_type":78,"title":643,"_source":80,"_file":644,"_extension":78,"tagsDetails":645},"/articles/home-loans/what-is-a-mortgage-modification","home-loans",6,{"introText":597,"text":598,"to":599},"Ready for the next step?","Connect with a Citi Specialist","/contact",{"landscape":601,"portrait":602},"/media/_what-is-a-mortgage-modification-mobile.jpg","/media/_what-is-a-mortgage-modification-desktop.jpg",{"src":604},"/media/_what-is-a-mortgage-modification-teaser.jpg","what-is-a-mortgage-modification",[607,610,613,616,619,622,625,628],{"title":608,"content":609},"What a mortgage modification is","A mortgage modification is a change to the terms of your existing home loan, offered when you’re experiencing financial hardship. Instead of replacing your mortgage, your lender adjusts parts of it to help make your payments more manageable. The goal is simple: to help you stay in your home and avoid falling further behind.\n\nIf your financial situation has shifted, a mortgage modification may offer a way to reshape your loan so it better fits your current circumstances.",{"title":611,"content":612},"How a mortgage modification works","A mortgage modification isn’t automatic. You need to apply before your lender reviews the request.\n\nAfter you apply, your lender will take a close look at your financial situation. They’ll want to understand what’s changed and decide whether you can realistically keep up with modified payments.\n\nFrom there, the lender may adjust your loan in one or more ways:\n\n* **Lower interest rate:** This can [reduce your monthly payment ](/home-loans/articles/how-to-lower-mortgage-payment/)and the amount you pay overall\n* **Longer loan term:** Spreading payments over more years can make them smaller\n* **Principal forbearance (in some cases):** A portion of what you owe may be set aside temporarily to help ease payments\n\nThe exact changes will depend on your situation, but the goal is to create a payment plan that’s more manageable and sustainable over time.",{"title":614,"content":615},"Who may qualify for a mortgage modification","Mortgage modifications are typically designed for homeowners experiencing financial hardship.\n\nHardships could include:\n\n* Job loss or reduced income\n* Illness or medical expenses\n* Divorce or major life changes\n* Unexpected financial strain\n\nThat said, hardship alone isn’t enough. Lenders also look for signs that:\n\n* You can afford the modified payments\n* Your situation is stable enough moving forward\n\nIn other words, they’re trying to strike a balance, offering relief while ensuring the new plan is sustainable.",{"title":617,"content":618},"Mortgage modification vs. refinancing","It’s easy to mix up mortgage modification and [refinancing](/refinancing/). While both options can change how your mortgage works, they’re designed for different circumstances.\n\n::inline-table{tableLayout=\"basic\" :headers='[{},{\"value\":\"Mortgage modification\"},{\"value\":\"Refinancing\"}]' :rows='[{\"column\":{\"valueOne\":\"Purpose\",\"valueTwo\":\"Helps homeowners who are struggling to keep up with payments due to financial hardship\",\"valueThree\":\"Helps homeowners improve their loan terms (like lowering their interest rate or changing the loan length) when they’re in a stable financial position\"}},{\"column\":{\"valueOne\":\"How it works\",\"valueTwo\":\"Adjusts the terms of your existing loan to make payments more manageable\",\"valueThree\":\"Replaces your current mortgage with a new one\"}},{\"column\":{\"valueOne\":\"Qualification\",\"valueTwo\":\"Based on demonstrating hardship and showing you can afford the updated payment\",\"valueThree\":\"Requires meeting standard lending criteria, including [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/), income and [debt-to-income ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)\"}},{\"column\":{\"valueOne\":\"Credit score and income requirements\",\"valueTwo\":\"Often more flexible, since the focus is on your\\ncurrent situation rather than a perfect financial profile\",\"valueThree\":\"Typically stricter, as lenders need to\\nconfirm you qualify for a brand-new loan\"}}]'}\n::\n\nIf refinancing is like trading in your car for a new model, a mortgage modification is more like repairing your current one so it runs more smoothly. The key difference comes down to your financial situation. Refinancing is usually an option when financial situations are steady, while a mortgage modification is designed to help when they’re not.",{"title":620,"content":621},"Pros and cons of mortgage modification","Like most financial tools, a mortgage modification comes with both benefits and a few things to think through, but for many homeowners, it can offer a meaningful sense of relief during a difficult time.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Pros\"},{\"value\":\"Cons\"}]' :rows='[{\"column\":{\"valueOne\":\"May lower your monthly payments\",\"valueTwo\":\"You may pay more in interest over the life of the loan if you extend the term\"}},{\"column\":{\"valueOne\":\"May help you avoid foreclosure\",\"valueTwo\":\"Approval isn’t guaranteed\"}},{\"column\":{\"valueOne\":\"May help improve your credit score long-term if you’re able to stick with the new payment schedule\",\"valueTwo\":\"May initially impact your credit score if your lender reports it as a settlement\"}}]'}\n::",{"title":623,"content":624},"How to apply for a mortgage modification","The mortgage modification process may vary depending on your lender and your individual situation, but here’s a general overview of what to expect.\n\n### 1. Contact your loan servicer\n\nStart by reaching out to the company that services your\nmortgage. Let them know what’s changed financially, even if you’re still\ncurrent on payments but see challenges ahead. Having that conversation early\ncan help make it easier to explore available options.\n\n### 2. Share your financial details\n\nNext, you’ll be asked to provide a snapshot of your\nfinances. This often includes income, monthly expenses and a short explanation\nof what’s caused the hardship. It might feel like a lot of paperwork, but it’s\nsimply how your lender gets a full picture of your situation.\n\n### 3. Complete any required trial payment period\n\nIn some cases, your lender may set up a temporary payment\nplan to see how the new terms work in practice. Keeping up with these payments\nhelps demonstrate that the adjustment is realistic for you.\n\n### 4. Finalize the modification\n\nIf everything checks out, your lender will move forward with\nupdating your loan terms. At that point, your new payment structure becomes\nofficial.\n\nAlternatives to consider\n\nA mortgage modification isn’t the only option available. Depending on your situation, you might also want to explore:\n\n* **Forbearance:** A temporary pause or reduction in payments, often used during short-term hardship\n* **Repayment plans:** A way to catch up on missed payments gradually over time, rather than all at once\n* **Refinancing:** If your finances are more stable, refinancing could help you secure different loan terms, such as a lower interest rate or a new loan length",{"title":626,"content":627},"Explore your options to stay on track","If your mortgage feels harder to manage than it used to, the most important thing you can do is act early.\n\nReaching out to your lender may feel uncomfortable, but it’s often the first step toward finding a solution. Whether it’s a mortgage modification or another option, there are paths that may help you stay in your home and regain a sense of control.",{"title":629,"hideTitle":27,"content":630},"Mortgage modification FAQs","::faq{headline=\"Mortgage modification FAQs\" :faqs='[{\"question\":\"What is the main purpose of a mortgage modification?\",\"answer\":\"A mortgage modification is designed to help make your existing loan more affordable if you’re facing financial hardship by adjusting terms like your interest rate or loan length.\"},{\"question\":\"Will a mortgage modification hurt my credit score?\",\"answer\":\"It may have some impact depending on your payment history and whether the modification is reported as a settlement. But if a modification helps you avoid missed payments or foreclosure, it could limit longer-term credit score damage.\"},{\"question\":\"How long does the mortgage modification process take?\",\"answer\":\"Timelines can vary, but the process often takes several weeks to a few months. If a trial payment period is required, it can extend the timeline.\"},{\"question\":\"Can I apply for a mortgage modification more than once?\",\"answer\":\"In some cases, yes. If your financial situation changes again, your lender may review a new request, though approval isn’t guaranteed.\"},{\"question\":\"Do I need to be behind on payments to qualify?\",\"answer\":\"Not always. Some lenders may consider your application if you can show you’re at risk of falling behind due to financial hardship.\"}]'}\n::","2026-07-27T14:09:00.000Z","**Key insights:**\n\n* A mortgage modification changes your existing loan terms to help make payments more manageable\n* It’s often designed for homeowners facing financial hardship, such as job loss or medical issues\n* Lenders may adjust your interest rate, extend your loan term or offer temporary relief options\n* It’s different than refinancing because you keep your current loan but update the terms\n\nIf keeping up with your [mortgage](/home-loans/articles/what-is-a-mortgage/) has started to feel like running uphill in sand, you’re not alone. Life has a way of throwing curveballs like job changes, unexpected expenses or health issues, and sometimes your original loan just doesn’t fit your situation anymore.\n\nThat’s where ahome loan modification may come in. It’s one of several options that could help homeowners stay on track when things get tough.","What is a mortgage modification?",[635,594],"first-time-buyer",{"to":599,"text":598,"introText":637,"body":638},"Looking for guidance tailored to your situation?","Explore your options and get expert support along the way.",{"title":640,"description":641},"What Is a Mortgage Modification? | Mortgage.com","Learn how a mortgage modification works, who may qualify and how changing your loan terms could help make payments more manageable during financial hardship.","content:articles:home-loans:what-is-a-mortgage-modification.json","What Is A Mortgage Modification","articles/home-loans/what-is-a-mortgage-modification.json",[646,650],{"label":647,"slug":635,"seo":648},"First Time Buyer",{"description":649},"Learn more about first time buyer with helpful articles, tools, and guides to support your homeownership journey.",{"label":651,"slug":594,"seo":652},"Home Loans",{"description":653},"Explore resources about home loans—including types, requirements, and how to choose the right mortgage option.",{"_path":655,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":595,"l1":594,"linkNav":656,"heroMedia":657,"teaserImage":660,"slug":662,"sections":663,"hideFooterJdPower":6,"date":691,"subheadline":692,"headline":693,"dateModified":7,"isFeatured":6,"tags":694,"link":695,"seo":698,"hasSectionNavigation":27,"_id":701,"_type":78,"title":702,"_source":80,"_file":703,"_extension":78,"tagsDetails":704},"/articles/home-loans/understanding-jumbo-loans",{"introText":597,"text":598,"to":599},{"landscape":658,"portrait":659},"/media/understanding-jumbo-loans-and-their-limits-mobile.jpg","/media/understanding-jumbo-loans-and-their-limits-desktop.jpg",{"src":661},"/media/understanding-jumbo-loans-and-their-limits-teaser.jpg","understanding-jumbo-loans",[664,667,670,673,676,679,682,685,688],{"title":665,"content":666},"What is a jumbo loan?","A jumbo loan is a mortgage that exceeds the conforming loan limits set each year by the Federal Housing Finance Agency (FHFA). Conforming loans stay within these limits and can be purchased by Fannie Mae or Freddie Mac, which helps reduce risk for lenders.\n\nJumbo loans don’t qualify for that backing. Because lenders hold more risk, they usually require stronger borrower credit profiles. That can mean higher credit score requirements, larger down payments and more documentation. The trade-off? Jumbo loans open the door to homes that conforming loans simply can’t cover.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP:\" text=\"Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that buy mortgages from lenders.\"}\n::",{"title":668,"content":669},"What are conforming loan limits?","Each year, the FHFA reviews home price trends across the U.S. and updates conforming loan limits to reflect how the housing market is changing. These limits set the maximum amount you can borrow with a conventional mortgage backed by Fannie Mae or Freddie Mac.\n\n* **Location:** Limits vary by state and county.\n* **Property type:** Single-family and multi-unit homes have different limits.\n* **Cost level of the area:** Higher-priced markets (like parts of California, New York, Hawaii and Washington, D.C.) have higher limits.",{"title":671,"content":672},"What’s the current jumbo loan limit?","There isn’t one single **jumbo loan cutoff** that applies everywhere. Instead, there are two standard **conforming loan limits**, and which one applies depends on where the home is located:\n\n* **Baseline conforming limit:** This applies to most counties across the U.S. and is usually around the $800,000 range, though the exact number changes annually.\n* **High-cost area limit:** In more expensive markets, conforming loans are allowed to go higher to better reflect local home prices.\n\nAny loan amount above the applicable limit for your area is considered a jumbo loan.\n\nEach year, the FHFA reviews national home price trends and updates these limits. That’s why you’ll see them change from year to year, so to check the most up-to-date figures, it’s best to visit the FHFA website.",{"title":674,"content":675},"When would you need a jumbo loan?","Most people discover they need a jumbo loan when they start matching their budget to real home prices. If the loan amount you need goes beyond standard limits, a jumbo loan may come into play. This can happen if you’re:\n\n* **Buying a higher-priced or luxury home:** The purchase price may push your loan amount beyond standard mortgage limits.\n* **Shopping in a high-cost market:** In some areas, even fairly typical homes can exceed conforming loan limits.\n* **Purchasing a 2–4 unit property:** Larger or multi-unit homes often require bigger loan amounts.\n* **In need of a larger loan:** Even with a solid down payment, standard loan options may not cover the full amount you need.",{"title":677,"content":678},"Jumbo loan requirements","Jumbo loans usually come with higher standards, but that doesn’t mean they’re out of reach. Lenders need to check whether you can comfortably handle a larger loan, so they tend to assess:\n\n* **[Credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/):** Many lenders look for credit scores around 700 or higher, and some may expect even higher scores for larger loan amounts. This helps show a strong history of managing credit responsibly.\n* **[Down payment](/home-buying/articles/how-much-money-do-you-need-to-buy-a-house/):** Jumbo loans commonly require down payments of around 20%, though some lenders may ask for 20–30%, depending on the loan size and your overall financial profile.\n* **[Debt-to-income ratio (DTI):](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)** Lenders often look for a DTI of 43% or lower (though the 36% mark is preferred), meaning your total monthly debts take up a smaller share of your income. This helps ensure you can comfortably manage higher payments.\n* **Income and employment:** You’ll need to show stable, verifiable income. Because the loan amount is larger, lenders may ask for additional documentation, such as tax returns or detailed income records, especially if your income varies.\n* **Cash reserves:** Many jumbo loans require 6–12 months of cash reserves, sometimes more. Reserves are savings that could cover your mortgage payments in an emergency, like an unexpected job change or major expense.\n* **[Appraisals](/home-buying/articles/home-appraisal/):** Since jumbo loans are tied to higher-value homes, lenders often require more detailed appraisals or even multiple appraisals to confirm the property’s value.",{"title":680,"content":681},"Pros and cons of jumbo loans","Just like any mortgage, jumbo loans have their advantages and downsides.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Pros\"},{\"value\":\"Cons\"}]' :rows='[{\"column\":{\"valueOne\":\"Access to higher-priced homes\",\"valueTwo\":\"Higher qualification standards\"}},{\"column\":{\"valueOne\":\"Competitive interest rates for strong borrowers\",\"valueTwo\":\"Larger down payment\"}},{\"column\":{\"valueOne\":\"No mortgage insurance in many cases\",\"valueTwo\":\"Potential for higher borrowing costs\"}},{\"column\":{\"valueOne\":\"Flexible use\",\"valueTwo\":\"Greater financial exposure\"}}]'}\n::",{"title":683,"content":684},"Jumbo loans vs. conforming loans","Both jumbo and conforming loans are common ways to finance a home. The key difference comes down to loan size. Here’s a look at how they compare.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Jumbo loans\"},{\"value\":\"Conforming loans\"}]' :rows='[{\"column\":{\"valueOne\":\"Amount exceeds FHFA limits\",\"valueTwo\":\"Amount stays within FHFA limits\"}},{\"column\":{\"valueOne\":\"Stricter credit and income requirements\",\"valueTwo\":\"More flexible qualification standards\"}},{\"column\":{\"valueOne\":\"Larger down payments and cash reserves\",\"valueTwo\":\"Lower down payments are possible\"}},{\"column\":{\"valueOne\":\"Not eligible for purchase by Fannie Mae or Freddie Mac\",\"valueTwo\":\"Backed by Fannie Mae or Freddie Mac\"}}]'}\n::",{"title":686,"content":687},"Tips for qualifying for a jumbo loan","Qualifying for a jumbo loan often comes down to preparation. Small steps taken early can make a meaningful difference and help the process feel smoother once you apply.\n\n* **Strengthen your credit profile before applying:** Paying bills on time and keeping balances in check can help put you in a stronger position before you apply. \n* **Lower your DTI:** Paying down existing debt can improve your overall cash flow and make higher loan amounts easier for lenders to support.\n* **Save up:** A larger down payment and extra savings can help you meet lender requirements and feel more comfortable financially.\n* **Keep income documentation organized:** Consistent, well-documented income helps lenders clearly understand your financial picture.\n* **Avoid major financial changes:** Making large purchases, opening or closing credit accounts or changing jobs during underwriting can slow things down or complicate approval.",{"title":689,"hideTitle":27,"content":690},"Jumbo loan limit FAQs","::faq{headline=\"Jumbo loan limit FAQs\" :faqs='[{\"question\":\"What is the jumbo loan limit?\",\"answer\":\"The jumbo loan limit refers to the maximum loan size allowed for conforming mortgages in a given area. Any loan amount above that limit is considered a jumbo loan. Each year, the FHFA sets these figures.\"},{\"question\":\"Does the jumbo loan limit vary by location?\",\"answer\":\"Yes. Jumbo loan limits depend on county-level conforming loan limits, which are higher in certain high-cost areas.\"},{\"question\":\"How do I know if my loan exceeds the jumbo loan limit?\",\"answer\":\"You can check the figures on the FHFA website to see if your loan is higher than the conforming limit for your county and property type.\"},{\"question\":\"Can the jumbo loan limit change?\",\"answer\":\"Yes. The FHFA reviews and updates conforming loan limits annually, which can shift where the jumbo mortgage threshold begins.\"}]'}\n::","2026-07-27T14:07:00.000Z","**Key insights:**\n\n* A jumbo loan is a mortgage that is larger than conforming loan limits\n* You might need a jumbo loan if you’re purchasing a luxury property or shopping in an area with a high cost of living \n* Jumbo loans may require larger down payments and stronger credit profiles than conforming loans \n\nSome homes just cost more than a traditional mortgage allows you to borrow. Whether you’re eyeing a luxury house, shopping in a high-cost area or purchasing a multi-unit property, the amount you need to borrow may exceed the conforming loan limit. That limit sets the maximum size for a standard conforming [mortgage](/home-loans/articles/what-is-a-mortgage/). When a home’s price goes beyond it, a [jumbo loan ](/home-loans/jumbo-loan/)can help bridge the gap.\n\nThis guide walks through what jumbo loans are, how limits are set, when you might need one and what lenders look for.","Understanding jumbo loans and their limits",[635,594],{"to":599,"introText":696,"body":697,"text":598},"Ready to see where your loan amount fits?","Knowing the jumbo loan limit for your area can help you plan with confidence.",{"title":699,"description":700},"Understanding Jumbo Loans and Their Limits | Mortgage.com","Learn what a jumbo loan is, how conforming loan limits work and when you may need one, plus key requirements to qualify for higher loan amounts.","content:articles:home-loans:understanding-jumbo-loans.json","Understanding Jumbo Loans","articles/home-loans/understanding-jumbo-loans.json",[646,650],{"_path":706,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":595,"l1":594,"linkNav":707,"heroMedia":708,"teaserImage":711,"slug":713,"disclosure":99,"sections":714,"date":745,"subheadline":746,"headline":747,"isFeatured":6,"tags":748,"link":751,"seo":754,"hasSectionNavigation":27,"_id":757,"_type":78,"title":758,"_source":80,"_file":759,"_extension":78,"tagsDetails":760},"/articles/home-loans/types-of-loans",{"introText":597,"text":598,"to":599},{"landscape":709,"portrait":710},"/media/article-different-mortgage-loans-available-mobile-768x512.jpg","/media/article-different-mortgage-loans-available-desktop-520x638.jpg",{"src":712},"/media/article-different-mortgage-loans-available-teaser-500x500.jpg","types-of-loans",[715,718,721,724,727,730,733,736,739,742],{"title":716,"hideTitle":27,"content":717},"Disclaimer","Disclaimer: Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":719,"content":720},"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":722,"content":723},"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":725,"content":726},"VA loans","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":728,"content":729},"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":731,"content":732},"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":734,"content":735},"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":737,"content":738},"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":740,"content":741},"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":743,"hideTitle":27,"content":744},"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",[749,750,594],"home-buying","loan-types",{"introText":752,"body":753,"text":598,"to":599},"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":755,"description":756},"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",[761,765,650],{"label":762,"slug":750,"seo":763},"Loan Types",{"description":764},"Explore resources about loan types—including types, requirements, and how to choose the right mortgage option.",{"label":766,"slug":749,"seo":767},"Home Buying",{"description":768},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"_path":770,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":771,"l1":594,"linkNav":772,"heroMedia":773,"teaserImage":776,"slug":778,"sections":779,"date":801,"subheadline":802,"headline":803,"isFeatured":6,"tags":804,"leadGenLoanPurpose":807,"link":808,"seo":811,"hasSectionNavigation":27,"_id":814,"_type":78,"title":815,"_source":80,"_file":816,"_extension":78,"tagsDetails":817},"/articles/home-loans/using-home-equity-to-pay-down-debt",3,{"introText":597,"text":598,"to":599},{"landscape":774,"portrait":775},"/media/smart-ways-to-use-home-equity-to-pay-down-debt-mobile-768x512.jpg","/media/smart-ways-to-use-home-equity-to-pay-down-debt-desktop-520x638.jpg",{"src":777},"/media/smart-ways-to-use-home-equity-to-pay-down-debt-teaser-500x500.jpg","using-home-equity-to-pay-down-debt",[780,783,786,789,792,795,798],{"title":781,"content":782},"What does it mean to use home equity for debt repayment?","Home equity is the difference between your home’s market value and what you owe on your mortgage. Borrowing against that equity gives you access to cash that can be used to pay down debt, but your house is used as collateral, and you are charged interest on the borrowed amount. The main options are:\n\n* **[Home equity loan](/home-loans/home-equity/)**: A fixed-interest lump sum with predictable payments\n* **[HELOC](/home-loans/heloc/) (home equity line of credit)**: A flexible line you can draw from as needed with a typical varied interest rate\n* **[Cash-out refinance](/refinancing/articles/cash-out/)**: Replacing your current mortgage with a larger one and keeping the difference",{"title":784,"content":785},"Why using home equity could be an option for paying down debt","When it comes to tackling debt, using your home’s equity could give you some clear advantages over credit cards or personal loans.\n\n### Lower interest rates\n\nHome equity financing often carries much lower rates than credit cards or unsecured lines of credit.\n\n### Potential for faster payoff\n\nLower rates mean less of your payment goes to interest, helping you to pay down your balance faster compared to higher-rate credit cards or unsecured lines of credit.\n\n### Simplified payments\n\nConsolidating multiple debts into one often results in easier budgeting and sometimes [lower payments](/tags/lower-payments/) overall.",{"title":787,"content":788},"Ways to use home equity to pay down debt","Here are some useful ways to put your home equity to work, but keep in mind there is some risk because your home is used as collateral:\n\n* Consolidate multiple debts into a single payment via a refinance\n* Pay off credit cards with a home equity loan at a lower interest rate\n* Pay off personal loans\n* Use a lump sum to eliminate a major monthly expense (like a car loan or student loan)\n\nFor some borrowers, using a home equity loan to pay off a single large balance can provide the biggest impact. Again, it should be considered carefully, as your home is used as collateral and a lender can take possession if payments aren’t made.",{"title":790,"content":791},"Risks and drawbacks to consider","It’s important to consider the pros and cons of using home equity to pay off high-interest debt before moving forward. While there may be some clear advantages, tapping into your home’s equity also comes with a few downsides you’ll want to keep in mind: \n\n* **Risk of foreclosure**: Using home equity irresponsibly could put your home on the line if you fall behind on payments.\n* **Higher total interest**: Extending your loan terms may increase the overall interest you pay.\n* **Reduced future borrowing power**: Tapping into equity now may limit options for future loans or emergencies.\n* **Upfront costs and fees:** Expenses such as appraisal, origination or closing fees can add to the overall cost of borrowing.\n\nWhether this approach makes sense depends on your overall financial situation and ability to manage repayment responsibly.",{"title":793,"content":794},"Alternatives to using home equity for debt repayment","Home equity isn’t the only way to tackle debt. Here’s how a few other solutions stack up:\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Option\"},{\"value\":\"Interest Rates\"},{\"value\":\"Risks/Considerations\"}]' :rows='[{\"column\":{\"valueOne\":\"Personal loans\",\"valueTwo\":\"Usually higher than home equity loans\",\"valueThree\":\"Fixed payments; no risk to your home\"}},{\"column\":{\"valueOne\":\"Balance transfer credit cards\",\"valueTwo\":\"Possible low promo APR, then higher rate\",\"valueThree\":\"Requires discipline to pay off before rates increase; no risk to your home\"}},{\"column\":{\"valueOne\":\"Debt management plans\",\"valueTwo\":\"Reduced rates may be negotiated\",\"valueThree\":\"Progress can be slower; no risk to your home\"}}]'}\n::\n\nCompared with home equity financing, these options often carry higher interest rates but involve less risk since your home isn’t used as collateral.",{"title":796,"content":797},"How to get started with a home equity loan or HELOC","Here are the basic steps:\n\n1. **Assess your equity:** Estimate your home’s value and subtract what you owe.\n2. **Check credit and income:** Lenders typically look for a strong credit history and a steady income.\n3. **Compare lenders and products:** Check rates, fees and terms for both home equity loans and [HELOCs](/home-loans/heloc/).\n4. **Submit documents:** Expect to provide pay stubs or proof of other forms of income, tax returns, proof of insurance and possibly a current appraisal.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Use our [HELOC Calculator](/calculators/heloc/) to estimate how much you can borrow and what your payments could look like.\"}\n::",{"title":799,"hideTitle":27,"content":800},"FAQs about using home equity for debt","\n\n::faq{headline=\"FAQs about using home equity for debt\" :faqs='[{\"question\":\"What types of debt can I pay off with home equity?\",\"answer\":\"You can generally use home equity to pay off high-interest debt such as credit cards, personal loans, student loans and other debts.\"},{\"question\":\"Is a HELOC a good way to pay off debt?\",\"answer\":\"It depends. A  HELOC may be an effective tool for debt consolidation of high-interest debts because it often offers lower interest rates than credit cards or personal loans. It could simplify payments and support credit score improvement if managed responsibly.\"},{\"question\":\"What are the risks of using home equity for debt consolidation?\",\"answer\":\"Your home is the collateral for a home equity loan, so if you fall behind on payments you risk losing your home. Also, you risk potentially paying more overall interest if you extend your term and reducing your future borrowing power.\"},{\"question\":\"How does using home equity to pay off debt affect my credit score?\",\"answer\":\"Paying down debts like credit cards may improve your credit score, but taking on new debt could cause a temporary dip.\"},{\"question\":\"Can I use home equity for debt consolidation?\",\"answer\":\"Yes. Many homeowners use a home equity loan or HELOC to combine multiple high-interest debts into a single payment, usually at a lower interest rate. Keep in mind, doing so means the house is used as collateral for the loan.\"},{\"question\":\"Can I use a home equity loan to pay off my mortgage?\",\"answer\":\"Yes, some borrowers use a home equity loan to pay off a mortgage if it offers better loan terms. Essentially the new home equity loan replaces the current mortgage.\"},{\"question\":\"Which is better for debt repayment: a HELOC or home equity loan?\",\"answer\":\"It depends on individual circumstances. When comparing a HELOC vs. a home equity loan, a HELOC provides flexibility for ongoing needs while a home equity loan offers fixed payments and is best for one-time payment of high-interest debt.\"},{\"question\":\"Will I save money on interest by using home equity to pay down debt?\",\"answer\":\"Home equity loans and HELOCs usually have lower rates than credit cards or personal loans. However, your exact savings will depend on your balances, interest rates and payment timeline.\"}]'}\n::","2025-09-29T13:37:00.000Z","Your house can do more than provide a roof over your head—it may also help you take control of your finances. By borrowing against the equity in your home through a [home equity loan](/home-loans/home-equity/) or [HELOC](/home-loans/heloc/), you might be able to lower interest costs, consolidate [debt](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) and create a clearer path toward financial freedom.  \n\nLet’s explore how to use home equity to pay off debt wisely, from consolidating credit cards to refinancing personal loans.","Smart ways to use home equity to pay down debt",[749,805,806],"refinancing-process","financial-planning","HELOC",{"introText":809,"body":810,"text":598,"to":599},"Want to tap into your home equity? ","We can help you sort through the options and potential next steps.",{"description":812,"title":813},"Learn how to use your home's equity to consolidate and pay off debt though a home equity loan, home equity line of credit (HELOC), or cash-out refinance. ","Way to Use Home Equity Loan to Pay Down Debt | Citi Mortgage","content:articles:home-loans:using-home-equity-to-pay-down-debt.json","Using Home Equity To Pay Down Debt","articles/home-loans/using-home-equity-to-pay-down-debt.json",[818,822,765],{"label":819,"slug":806,"seo":820},"Financial Planning",{"description":821},"Learn more about financial planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":823,"slug":805},"Refinancing Process",{"_path":825,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":826,"l1":594,"linkNav":827,"heroMedia":828,"teaserImage":831,"slug":833,"sections":834,"date":856,"subheadline":857,"headline":842,"isFeatured":6,"tags":858,"link":860,"seo":863,"hasSectionNavigation":27,"_id":866,"_type":78,"title":867,"_source":80,"_file":868,"_extension":78,"tagsDetails":869},"/articles/home-loans/heloc-as-down-payment-second-home",5,{"introText":597,"text":598,"to":599},{"landscape":829,"portrait":830},"/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":832},"/media/can-you-use-a-heloc-as-a-down-payment-on-second-home-teaser-500x500.jpg","heloc-as-down-payment-second-home",[835,838,841,844,847,850,853],{"title":836,"content":837},"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":839,"content":840},"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":842,"content":843},"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":845,"content":846},"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":848,"content":849},"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":851,"content":852},"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":854,"hideTitle":27,"content":855},"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.",[749,805,859],"budget-planning",{"introText":861,"body":862,"text":598,"to":599},"Questions about using a HELOC for a second home?","We can walk you through eligibility, lender requirements and alternatives.",{"title":864,"description":865},"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",[870,822,765],{"label":871,"slug":859,"seo":872},"Budget Planning",{"description":873},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"_path":875,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":771,"l1":594,"linkNav":876,"heroMedia":877,"teaserImage":880,"slug":882,"sections":883,"date":901,"subheadline":902,"headline":903,"isFeatured":6,"tags":904,"leadGenLoanPurpose":807,"link":905,"seo":908,"hasSectionNavigation":27,"_id":911,"_type":78,"title":912,"_source":80,"_file":913,"_extension":78,"tagsDetails":914},"/articles/home-loans/heloc-to-buy-another-property",{"introText":597,"text":598,"to":599},{"landscape":878,"portrait":879},"/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":881},"/media/can-you-use-a-heloc-to-buy-another-property-teaser-500x500.jpg","heloc-to-buy-another-property",[884,886,889,892,895,898],{"title":836,"content":885},"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":887,"content":888},"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":890,"content":891},"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":893,"content":894},"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":896,"content":897},"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":899,"hideTitle":27,"content":900},"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?",[749,805,594],{"introText":906,"body":907,"text":598,"to":599},"Still not sure about using a HELOC for another property?","We can help you sort through the pros, cons and potential next steps.",{"title":909,"description":910},"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",[822,765,650],{"_path":916,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":917,"l1":594,"linkNav":918,"heroMedia":919,"teaserImage":922,"slug":924,"disclosure":99,"sections":925,"date":947,"subheadline":948,"headline":949,"dateModified":950,"isFeatured":6,"tags":951,"link":953,"seo":956,"hasSectionNavigation":27,"_id":959,"_type":78,"title":960,"_source":80,"_file":961,"_extension":78,"tagsDetails":962},"/articles/home-loans/va-irrrl-streamline-refinance",7,{"introText":597,"text":598,"to":599},{"landscape":920,"portrait":921},"/media/va-irrrl-mobile-768x512.jpg","/media/va-irrrl-desktop-520x638.jpg",{"src":923},"/media/va-irrrl-teaser-500x500.jpg","va-irrrl-streamline-refinance",[926,929,932,935,938,941,944],{"title":927,"content":928},"What is a VA IRRRL?","Despite its long name, the VA IRRRL (pronounced “Earl”), or VA streamline refinance, is one of the most efficient ways to refinance an existing VA loan. It’s a special kind of VA loan refinance typically requiring no income requalifying, no appraisal and fewer documents, leading to a faster closing than traditional [refinance types](/refinancing/). It’s often used to lower monthly payments, switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan, or both—without a lot of hassle.",{"title":930,"content":931},"How does a VA IRRRL streamline refinance work?","### Step-by-step IRRRL process\n\nA VA IRRRL simplifies the refinance process into just a few key steps. You’ll work with a VA-approved lender to confirm your eligibility, adjust your loan terms and close—usually within 30 days or less.\n\n1. Confirm eligibility. You must already have a VA-backed loan and meet basic program requirements. Visit [va.gov](https://www.va.gov/housing-assistance/home-loans/loan-types/interest-rate-reduction-loan/) for more details.\n\n2. Find a VA-approved lender. Shop around—rates, terms and fees can vary. A little upfront research can help you save more over time. Citi, for example, is a recognized VA loan lender, offering expertise in managing VA IRRRL loans efficiently.\n\n3. Apply. The paperwork is minimal, and you likely won’t need a new Certificate of Eligibility (COE). Your lender can usually access an electronic copy from the VA.\n\n4. Close on your new loan. Most IRRRLs close in about 30 days. You can often roll closing costs into the new loan, which means less cash out of pocket. \n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Be cautious of any offers that sound too good to be true, like skipped payments or exceptionally low interest rates. Always ask questions, read the fine print and make sure the numbers make sense for your situation.\"}\n::",{"title":933,"eyebrowBullet":6,"content":934,"label":7,"eyebrow":7},"Who Is eligible for a VA IRRRL?","You may qualify for a VA streamline refinance if you:\n\n* Currently have a VA-backed loan\n* Live in or have previously lived in the home covered by the loan\n* Are up to date on mortgage payments and in good standing with your current lender\n\nA couple other points to note:\\\nIf you have a second mortgage, that lender must agree to let the new VA-backed loan stay in first position. And importantly, your new loan must meet the VA’s “Net Tangible Benefit” rule, which is one of the VA IRRRL guidelines established to ensure refinancing offers a clear financial benefit to the borrower. In short, the new loan must offer an advantage, such as a lower interest rate or a more stable loan structure.",{"title":936,"content":937}," VA IRRRL rates and typical costs","One of the biggest perks of a VA IRRRL is the rate. VA streamline refinance rates are usually lower than market averages, especially when compared to conventional refinance options.\n\nThat said, it's important to shop around. Rates fluctuate daily, and your final rate will depend on factors like your credit score, loan term and loan structure. Comparing offers from multiple VA-approved lenders can help you find the best deal.\n\n### 2025 rate snapshot\n\n*Based on a $300,000, 30-year fixed rate loan* \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"VA IRRRL\"},{\"value\":\"Conventional Loan\"}]' :rows='[{\"column\":{\"valueOne\":\"Average interest rate\",\"valueTwo\":\"6.125%\",\"valueThree\":\"6.85%\"}},{\"column\":{\"valueOne\":\"Est. monthly payment\",\"valueTwo\":\"$1,822.83\",\"valueThree\":\"$1,965.78\"}},{\"column\":{\"valueOne\":\"Monthly savings\",\"valueTwo\":\"$142.95\",\"valueThree\":\"=\"}}]'}\n::\n\nSource: Freddie Mac \n\nOver five years, that monthly amount adds up to more than $8,500 that you can save by choosing a VA IRRRL over of a traditional refinance.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Thinking about refinancing? Our [Mortgage Refinance Calculator](/calculators/refinance/) can help you decide if it’s worth it.\"}\n::\n\n### **VA IRRRL closing costs explained**\n\nWhile there’s no down payment or mortgage insurance required, there are still standard closing costs to plan for. The good news is that most of these costs can be rolled into your loan, so you may not have to pay them up front.\n\nSome lenders also offer what’s called a “lender credit,” meaning they’ll cover the closing costs in exchange for a slightly higher interest rate. \n\nTypical VA IRRRL closing costs may include:\n\n* Title and recording fees\n* Real estate taxes\n* Title insurance\n* Lender origination fees\n* VA funding fee\n\nA note on the VA funding fee: Even though the fee applies to IRRRLs, it’s much lower than the fee for a typical VA purchase loan. For most borrowers, it’s 0.5% of the loan amount. Some people may qualify for an exemption, including active-duty members who received the Purple Heart.",{"title":939,"content":940},"VA IRRRL vs. traditional refinance","The VA IRRRL was designed for ease and speed. Since it’s a no-cash-out refinance and doesn’t tap into your home equity, it’s one of the simplest refinance options available to eligible VA loan holders. Here’s a quick look at how it compares to traditional refinancing.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"VA IRRRL\"},{\"value\":\"Traditional Refinance\"}]' :rows='[{\"column\":{\"valueOne\":\"Who qualifies\",\"valueTwo\":\"VA loan holders only\",\"valueThree\":\"Open to most borrowers\"}},{\"column\":{\"valueOne\":\"Appraisal\",\"valueTwo\":\"Not required\",\"valueThree\":\"Required\"}},{\"column\":{\"valueOne\":\"Income verification\",\"valueTwo\":\"Not required\",\"valueThree\":\"Required\"}},{\"column\":{\"valueOne\":\"Interest rates\",\"valueTwo\":\"Often lower than market averages\",\"valueThree\":\"Varies by lender and credit score\"}},{\"column\":{\"valueOne\":\"Typical timeline\",\"valueTwo\":\"30 days or less\",\"valueThree\":\"30-45 days or more\"}},{\"column\":{\"valueOne\":\"Closing costs\",\"valueTwo\":\"Can be rolled into the loan\",\"valueThree\":\"Typically paid at closing\"}}]'}\n::\n\n\n\n### Key differences in requirements\n\nThe biggest difference between a VA IRRRL and a traditional refinance is how easy the process can be. It’s available only to borrowers with an existing VA loan, and there’s no appraisal, no income check and far less paperwork. Most close in under 30 days, and you can usually roll closing costs into the loan. By contrast, traditional refinancing is open to more borrowers but comes with more steps: income and credit checks, a full appraisal and more time to close.\n\n### Pros and cons of VA IRRRLs\n\nLike any loan option, a VA IRRRL has its strengths and limitations. Here’s a closer look at both to help you decide if it’s the right move for you.\n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"PROS\"},{\"column\":\"CONS\"}]},{\"row\":[{\"column\":\"Streamlined process with less paperwork\"},{\"column\":\"Available only to current VA loan holders\"}]},{\"row\":[{\"column\":\"No appraisal required\"},{\"column\":\"No cash-out option\"}]},{\"row\":[{\"column\":\"No income or employment verification\"},{\"column\":\"VA funding fee applies (typically 0.5% of the loan amount)\"}]},{\"row\":[{\"column\":\"Typically lower interest rates\"},{\"column\":\"Must meet a “net tangible benefit” requirement\"}]},{\"row\":[{\"column\":\"Most closing costs can be rolled into the loan\"},{\"column\":\"Rates and terms vary by lender, so shopping around is still important\"}]},{\"row\":[{\"column\":\"Ideal for switching from an ARM to a fixed-rate mortgage\"},{}]}]'}\n::",{"title":942,"content":943},"When should you consider a VA streamline refinance?","When rates drop or plans change, a VA IRRRL can help you make the switch to a more affordable or stable loan with less hassle. Here are some common scenarios when refinancing could be the right move.\n\n* **Interest rates have dropped, or you want lower monthly payments**\n\n  Even a modest rate drop could lead to meaningful savings, especially if you’re early in your VA loan term. Keep in mind: Rates need to be lower than your current rate unless you’re moving from an ARM.\n* **You want to move from an ARM to a fixed-rate loan**\n\n  Locking in a stable rate can offer peace of mind and protects against future increases. In this case, your new rate does not have to be lower, but you must be able to recoup closing costs, fees and expenses within 36 months of the refinance.\n* **You need to remove a co-borrower from your loan**\n\n  After events like a divorce or separation, a VA IRRRL may help update loan ownership, though this depends on your lender’s specific guidelines.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Refinancing within 36 months of your last VA loan may still be worth it. If rates have dropped or you’re switching to a fixed-rate loan, the long-term savings could outweigh the short-term costs—especially if you plan to stay in your home for a while.\"}\n::",{"title":945,"content":946,"hideTitle":27},"VA IRRRL FAQs","::faq{headline=\"VA IRRRL FAQs\" :faqs='[{\"question\":\"What is a VA IRRRL?\",\"answer\":\"A VA IRRRL, or Interest Rate Reduction Refinance Loan, is a streamlined refinance option for current VA loan holders. It helps borrowers lower their interest rate or switch from an ARM to a fixed-rate loan with less paperwork and a faster process than a traditional refinance.\"},{\"question\":\"Do I need an appraisal for VA IRRRL?\",\"answer\":\"In most cases, no appraisal is required, making the process quicker and easier.\"},{\"question\":\"Who qualifies for VA streamline refinance?\",\"answer\":\"To qualify, you must already have a VA-backed loan and be current on your mortgage payments. The refinance must also provide a clear financial benefit, like a lower monthly payment or more stable loan terms, to meet the VA streamline requirements.\"},{\"question\":\"How do VA IRRRL rates today compare to other refinance options?\",\"answer\":\"VA streamline refinance rates are often lower than rates for conventional refinances. Your exact rate will depend on the lender, your credit profile and the loan term.\"},{\"question\":\"How long does the VA IRRRL process take?\",\"answer\":\"Many VA IRRRLs close in 30 days or less. Since there’s typically no need for an appraisal or income verification, the process tends to move faster than traditional refinances. \"}]'}\n::","2025-07-29T13:19:00.000-05:00","A VA Interest Rate Reduction Refinance Loan (VA IRRRL), also known as a VA streamline refinance, makes it easier for [VA loan](/home-loans/va-loan/) holders to lower their monthly mortgage payments—with no appraisal, no income verification and minimal paperwork. It’s a fast way to take advantage of lower interest rates.","VA streamline refinance (IRRRL): rates and requirements","2026-07-17T13:03:00.000Z",[749,952],"refinancing",{"introText":954,"body":955,"text":598,"to":599},"Ready to learn if you can save with a VA IRRRL?","A VA IRRRL could simplify your refinance and potentially save you money. See if you qualify.",{"title":957,"description":958},"What Is a VA Streamline Refinance Loan? | Mortgage.com","A VA streamline refinance (IRRRL) lets eligible veterans refinance with minimal paperwork. Learn current rates and how to qualify.","content:articles:home-loans:va-irrrl-streamline-refinance.json","Va Irrrl Streamline Refinance","articles/home-loans/va-irrrl-streamline-refinance.json",[765,963],{"label":964,"slug":952,"seo":965},"Refinancing",{"description":966},"Learn more about refinancing with helpful articles, tools, and guides to support your homeownership journey.",{"_path":968,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":969,"l1":594,"linkNav":970,"heroMedia":971,"teaserImage":974,"slug":976,"disclosure":99,"sections":977,"date":999,"subheadline":1000,"headline":1001,"dateModified":1002,"isFeatured":6,"tags":1003,"link":1004,"seo":1007,"hasSectionNavigation":27,"_id":1010,"_type":78,"title":1011,"_source":80,"_file":1012,"_extension":78,"tagsDetails":1013},"/articles/home-loans/fixed-vs-adjustable-rate",8,{"introText":597,"text":598,"to":599},{"landscape":972,"portrait":973},"/media/fixed-vs-adjustable-rate-loans-mobile-768x512.jpg","/media/fixed-vs-adjustable-rate-loans-desktop-520x638.jpg",{"src":975},"/media/fixed-vs-adjustable-rate-loans-teaser-500x500.jpg","fixed-vs-adjustable-rate",[978,981,984,987,990,993,996],{"title":979,"content":980},"What’s the difference between a fixed vs. adjustable-rate mortgage?","Fixed-rate and adjustable-rate mortgages are two of the most common loan options for\nhomebuyers. The difference between them is how the interest rate behaves over\ntime:\n\n* [Fixed-rate mortgages:](/home-loans/fixed-rate/) Your interest rate, monthly principal and interest payments stay the same for the life of the loan.\n* [Adjustable-rate mortgages](/home-loans/adjustable-rate/): Also called variable-rate mortgages, ARMs typically start with a lower interest rate than a fixed loan, which means lower initial payments. But over time, the rate can adjust with the market, so your payments may go up or down. \n\n When weighing ARM vs. fixed-rate mortgage, consider how long you plan to hold the loan and whether potential rate changes could impact your monthly finances. The adjustable-rate mortgage structure may appeal to buyers planning a shorter stay or anticipating income growth, while a fixed-rate loan is often better for buyers who prefer predictable payments that help to make budgeting simpler. \n\nThe type of mortgage you select can shape your monthly budget and influence your long-term financial flexibility. Unsure if an adjustable-rate mortgage or a fixed-rate mortgage better fits your finances? Use our [Mortgage Calculator ](/calculators/monthly/)to compare payments.",{"title":982,"content":983},"What is a fixed-rate mortgage?","The definition of a fixed-rate mortgage is simple: Your mortgage interest rate and the principal and interest portion of your monthly payment stay the same for the life of the loan. Whether you choose\na 15- or 30-year mortgage, your rate won’t change. That kind of consistency can be a huge plus for long-term planning and budgeting. \n\n### Why a fixed rate is best for some buyers \n\n* More predictable loan payments over the term of the loan\n* Protection from rising mortgage interest rates\n* Helpful budgeting over the life of the loan \n\nFixed-rate loans are ideal when you want consistency in payments, especially if [interest rates](/rates/) rise.\n\nIf your priority is locking in a rate long-term, a fixed-rate loan can help mitigate the risk of future\nincreases. \n\n::callout{title=\"Fixed doesn’t mean frozen\" body=\"Even with a fixed-rate loan, your monthly mortgage payment can still change.  That’s because most mortgages include property taxes and  homeowners insurance, which are paid through an [escrow account](/home-buying/articles/what-is-escrow/). If your real estate taxes or homeowners insurance premiums increase, your escrow payments—and therefore your monthly mortgage bill—may go up, too.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::",{"title":985,"content":986},"What is an adjustable-rate mortgage?","An adjustable-rate mortgage (sometimes called a variable-rate mortgage) is a home loan with an interest rate that can change over time. Most ARMs start with a lower introductory rate, typically set for 5, 7 or 10 years. After that period, your rate adjusts at regular intervals based on market conditions. \n\nThis structure is often described using a format like 10/6 ARM—but what does that mean?  \n\n• The “10” refers to the number of years your rate stays fixed at the beginning. \n\n• The “6” means that the rate will adjust once every six months after the fixed period ends. \n\n### How does an ARM work?\n\nAfter the initial fixed period, your interest rate resets based on two components: \n\n1. **Index:** A market-based rate, such as the Secured Overnight Financing Rate [(SOFR)](https://www.newyorkfed.org/markets/reference-rates/sofr?) or the[ 1 Year Treasury Rate,](https://ycharts.com/indicators/1_year_treasury_rate?) maintained by the U.S. Treasury.\n2. **Margin:** A fixed rate set by your lender (e.g., 2.25%).\n\n### New rate = index + margin \n\nFor example, if SOFR is 4.00% and the margin is 2.25%, your new rate would be 6.25%. \n\nARMs also include rate caps that limit how much your interest rate (and monthly payment) can increase at each adjustment and over the life of the loan. \n\nCheck [current mortgage rates](/rates/) to see how today’s market may affect your future payments. \n\n### Why an ARM is best for some buyers \n\nAdjustable-rate mortgages aren’t for everyone, but for certain buyers they can be a smart, cost-effective choice. If your plans are short-term, or your financial situation is likely to change, the flexibility of an ARM could work in your favor.  \n\n* **Lower initial rate:** You’ll typically pay less initially compared to a fixed-rate loan. \n* **Smart for short stays:** If you plan to move or refinance before the rate adjusts, you could save thousands. \n* **Built-in flexibility:** An ARM may be a solid option if you anticipate your income to grow or your housing needs to change.\n\nWant to dig deeper? The [Consumer Financial Protection Bureau ](https://www.consumerfinance.gov/owning-a-home/explore/adjustable-rate-mortgages/?)offers a helpful guide to how ARMs work.",{"title":988,"content":989},"Key differences between fixed-rate vs. adjustable-rate mortgages","::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Feature\"},{\"value\":\"Fixed\"},{\"value\":\"ARM\"}]' :rows='[{\"column\":{\"valueOne\":\"Interest rate stability\",\"valueTwo\":\"Fixed for the entire loan term\",\"valueThree\":\"Fixed during intro period, then adjusts\"}},{\"column\":{\"valueOne\":\"Monthly payment predictability\",\"valueTwo\":\"Principal and interest payments stay the same every month\",\"valueThree\":\"Payments may increase or decrease after intro period\"}},{\"column\":{\"valueOne\":\"Intro rate range\",\"valueTwo\":\"Typically higher than ARM rates\",\"valueThree\":\"Typically lower than fixed rates during intro period\"}},{\"column\":{\"valueOne\":\"Risk of increase\",\"valueTwo\":\"None—rate stays the same\",\"valueThree\":\"Moderate to high, depending on market changes\"}},{\"column\":{\"valueOne\":\"Ideal borrower profile\",\"valueTwo\":\"Buyers planning to stay long-term or prioritize stability\",\"valueThree\":\"Short-term buyers, frequent movers or those expecting higher income\"}},{\"column\":{\"valueOne\":\"Best use case\",\"valueTwo\":\"Long-term homeownership and consistent budgeting\",\"valueThree\":\"Selling or refinancing before the rate adjusts, maximizing early savings\"}}]'}\n::",{"title":991,"content":992},"Pros and cons of each loan type","No mortgage is one-size-fits-all. Both fixed-rate and adjustable-rate loans come with unique benefits and trade-offs. Here's a breakdown to help you weigh your options based on your financial goals and homeownership timeline.\n\n### Pros and cons of a fixed-rate mortgage\n\nFixed-rate mortgages are a popular choice for buyers who value long-term stability and predictable payments. Here’s what to consider: \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Pros\"},{\"value\":\"Cons\"}]' :rows='[{\"column\":{\"valueOne\":\"Interest rate stays the same over the life of the loan\",\"valueTwo\":\"Higher starting interest rates than ARMs\"}},{\"column\":{\"valueOne\":\"Predictable monthly payments help to make budgeting easier\",\"valueTwo\":\"Less flexibility if you move or refinance within a few years\"}},{\"column\":{\"valueOne\":\"Offers stability and peace of mind, especially for long-term stays\",\"valueTwo\":\"May cost more overall if you don’t keep the loan long-term\"}},{\"column\":{\"valueOne\":\"Easier to help plan your finances over time\",\"valueTwo\":\"Could miss out on savings if market rates fall\"}}]'}\n::\n\n### Pros and cons of an adjustable-rate mortgage\n\nARMs can offer more savings early on—but can come with greater uncertainty down the road. They’re best suited for buyers with short-term plans or flexible budgets\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Pros\"},{\"value\":\"Cons\"}]' :rows='[{\"column\":{\"valueOne\":\"Lower initial interest rate and monthly payments\",\"valueTwo\":\"Monthly payments can increase after the fixed period ends\"}},{\"column\":{\"valueOne\":\"Can save money if you sell or refinance before the rate adjusts\",\"valueTwo\":\"Harder to budget long-term due to rate variability\"}},{\"column\":{\"valueOne\":\"Possible benefit if interest rates go down\",\"valueTwo\":\"Risk of payment shock if rates rise quickly\"}},{\"column\":{\"valueOne\":\"Often ideal for short-term homeowners or investors\",\"valueTwo\":\"Complex terms can be confusing for first-time buyers.\"}}]'}\n::",{"title":994,"content":995},"When to choose an adjustable-rate vs. fixed-rate mortgage","Choosing between a fixed-rate and an adjustable-rate mortgage isn’t just a numbers game. It’s about how your mortgage fits into your life.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP:\" text=\"If you plan to move, refinance or earn more in the next few years, an ARM might help you save upfront. But if you want stability and peace of mind, a fixed-rate loan may be the right fit.\"}\n::\n\n### Potential buyer scenarios\n\nStill not sure which mortgage is the right fit? Sometimes it helps to see how different loan types work for different lifestyles. Here are a few real-world examples that show how your plans, timeline and financial goals can influence the best mortgage choice. \n\n#### The “forever home” family \n\n**Profile:** Vanessa and James are expecting their second child and just bought a 4-bedroom house in a good school district. They plan to raise their family here and stay for at least 15 years. \n\n**Best fit:** Fixed-rate mortgage\n\n**Why:** With a long-term stay in mind, they want predictable payments and a stable budget. A fixed rate helps to give them peace of mind, year after year.\n\n#### The frequent mover \n\n**Profile:** Nina is a corporate strategist who relocates every 3 to 5 years. She’s buying a condo she doesn’t plan to keep long. \n\n**Best fit:** ARM \n\n**Why:** Nina can enjoy the lower starting rate and likely sell before the ARM adjusts, keeping her costs lower while she owns the home. \n\n#### The strategic investor \n\n**Profile:** Taylor is buying a duplex and planning to live in one unit and rent out the other. They expect to hold the property for 3 to 5 years before upgrading to a larger home. \n\n**Best fit:** ARM \n\n**Why:** The lower intro rate helps keep expenses low in the early years, improving rental income margins. Since Taylor plans to sell within a few years, they’ll likely avoid any significant rate increases.\n\n#### The downsizing retirees \n\n**Profile:** Maria and Luis just retired and are moving into a smaller home. Their income is fixed, and they want to avoid financial surprises. \n\n**Best fit:** Fixed-rate mortgage \n\n**Why:** A fixed-rate loan locks in their payment amount for the life of the loan, helping to give them budgeting stability during retirement. \n\nLooking for more help deciding? Check out the [CFPB Interest Rate Explorer](https://www.consumerfinance.gov/owning-a-home/explore-rates/?) for more tools and insights.",{"title":997,"hideTitle":27,"content":998},"Adjustable-rate vs. fixed-rate mortgages FAQs","::faq{headline=\"Adjustable-rate vs. fixed-rate mortgages FAQs\" :faqs='[{\"question\":\"Is a fixed rate or adjustable rate better?\",\"answer\":\"Whether a fixed rate or adjustable rate is better depends on your financial situation, long-term goals and risk tolerance. A fixed-rate mortgage may be better if you want predictable monthly payments for the entire term of the loan. An adjustable-rate mortgage may be attractive if you anticipate your income increasing, plan to move before the introductory fixed-rate period ends or are comfortable with some financial risk in return for lower initial payments.\"},{\"question\":\"Is an adjustable-rate mortgage a good idea in 2026?\",\"answer\":\"That depends on two things: where rates are headed and how long you plan to stay in the home. If rates are expected to fall, or if you plan to move or refinance within a few years, an ARM could offer short-term savings.\"},{\"question\":\"What are the risks of an ARM?\",\"answer\":\"Your rate—and payment—can increase. If your income is stable or growing, that might not be a problem. But if your budget is tight, rising payments could be a challenge.\"},{\"question\":\"How do I know which loan type is right for me?\",\"answer\":\"Consider your timeline, income stability and tolerance for change. Prefer predictability and plan to stay put? A fixed-rate loan may be best. Expect changes in income or plan to move in a few years? An ARM could offer flexibility and savings.\"},{\"question\":\"Can I switch from an ARM to a fixed-rate mortgage later?\",\"answer\":\"Yes. Many people refinance from an ARM to a fixed-rate loan. Just be sure to factor in refinancing costs and the current rate environment when making your decision.\"}]'}\n::","2025-07-28T15:26:00.000-05:00","**Key insights:** \n\n* Fixed-rate mortgages offer consistent interest rates and predictable payments, making them ideal for buyers who value long-term stability and budgeting\n* Adjustable-rate mortgages typically start with lower initial rates, which can reduce early payments but may\n  increase or decrease over time based on market conditions  \n* Choosing between a fixed or adjustable rate depends on how long you plan to keep the loan, your tolerance for rate changes and your overall financial goals\n\nWhen choosing a home loan, the decision between a fixed-rate vs. an adjustable-rate mortgage matters. The right [mortgage](/home-loans/articles/what-is-a-mortgage/) depends on your goals and tolerance for market rate shifts. Want predictability? Go for a fixed-rate mortgage. Looking for short-term savings or planning to move in a few years? An adjustable-rate mortgage (ARM) might work better for you.","Adjustable- vs. fixed-rate mortgage: Which is right for you?","2026-05-06T18:00:00.000Z",[749,750],{"introText":1005,"body":1006,"text":598,"to":599},"Ready to find the right loan for you?","Whether you're leaning toward fixed, curious about ARMs or still weighing both, we’re here to help.",{"title":1008,"description":1009},"Fixed vs. Adjustable-Rate Mortgage | Mortgage.com","Adjustable-rate mortgage or fixed-rate mortgage? Learn the pros and cons and how they work in home-buying scenarios to see which loan makes sense for you.","content:articles:home-loans:fixed-vs-adjustable-rate.json","Fixed Vs Adjustable Rate","articles/home-loans/fixed-vs-adjustable-rate.json",[761,765],{"_path":1015,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":1016,"l1":594,"linkNav":1017,"heroMedia":1018,"teaserImage":1021,"slug":1023,"sections":1024,"date":1052,"subheadline":1053,"headline":1054,"dateModified":1055,"isFeatured":6,"tags":1056,"link":1057,"seo":1059,"hasSectionNavigation":27,"_id":1062,"_type":78,"title":1063,"_source":80,"_file":1064,"_extension":78,"tagsDetails":1065},"/articles/home-loans/what-is-a-mortgage",10,{"introText":597,"text":598,"to":599},{"landscape":1019,"portrait":1020},"/media/article-what-is-a-mortgage-mobile-768x512.jpg","/media/article-what-is-a-mortgage-desktop-520x638.jpg",{"src":1022},"/media/article-what-is-a-mortgage-teaser-500x500.jpg","what-is-a-mortgage",[1025,1028,1031,1034,1037,1040,1043,1046,1049],{"title":1026,"content":1027},"How does a mortgage loan work?","Browsing online real estate listings is fun, but what if you see your dream home and want to do something about it? Most of us can’t afford to buy an entire house with cash. That’s where a mortgage comes in.  \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. \\nWith a mortgage, like other loans, you borrow money from a  lender and pay it back over time with interest. In the meantime, you get to settle in and make the place your home.\"'}\n::",{"title":1029,"content":1030},"Who’s involved in a mortgage loan?","A mortgage loan might be one of the biggest loans you 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 can manage the payments—but more on that in a bit.  \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* **Co-borrower:** A co-borrower is someone who jumps in alongside the primary borrower to apply for the mortgage. It might be a spouse, partner or perhaps a close family member who’s willing to share the responsibility of paying back the loan. If both you and the co-borrower have 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. \n\nCiti’s [online mortgage application process](https://online.citi.com/US/ag/mortgage/your-citi-account)  makes it easy to add a co-borrower and explore the best loan options for you before making a decision.",{"title":1032,"content":1033},"What’s included in a mortgage payment?","A mortgage payment is broken down into several costs. Depending on factors like your down payment amount and where the home’s located, your payment may include: \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” status 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. If you put down less than 10% on an [FHA loan](/home-loans/fha-loan/), MIP lasts for the loan duration. With a down payment of 10% or more, MIP can be removed after 11 years.\n* **[Private mortgage insurance (PMI)](/home-buying/articles/pmi-home-loan/):** This may be required if you make less than a 20% down payment. It protects the lender in case you default on your loan.  \n* **Taxes and insurance:** You’ll generally put funds into an escrow account (kind of like a safety deposit box) to cover property taxes and homeowners 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.  \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::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 additional payments regularly or when they come into extra money. Always verify that you won’t incur fees for achieving your financial goals ahead of schedule.\"}\n::",{"title":1035,"content":1036},"Types of mortgage loans","When it comes to mortgages, there are lots of [loan options](/home-loans/) to choose from. While most mortgages work more or less the same way, each may have different pros and cons, so be sure to fully assess your situation when choosing the right one for you.\n\n\nThese are some of the most common mortgage options:   \n\n### Institutional lender loans\n\nBanks and other private financial entities, such as Citi, offer mortgage programs that feature flexible eligibility requirements and lower expenses for [first-time home buyers](/home-buying/articles/first-time-home-buyer) and [experienced buyers](/tags/loan-process/) alike. For instance, [Citi's HomeRun® Mortgage](/home-loans/home-run) is a unique program that requires a low [down payment ](/home-buying/articles/how-much-down-payment-for-a-house)and helps people from various financial backgrounds purchase a 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\\n\\nHomeRun® is available in markets with Citibank branches 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 $832,750. Certain condo and co-op projects may be subject to lower LTVs. Single-family homes in certain high-cost markets with loan amounts between $832,751 and $1,249,125 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 $1,066,250, or 85% up to $1,599,375 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 eligible for purchase 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, these loans are great for first-time home buyers or those with a lower credit score. With lower down payments and flexible guidelines, FHA loans could be more accessible for eligible borrowers than conventional mortgages. \n* **[VA loans](/home-loans/va-loan):** The U.S. Department of Veterans Affairs backs loans to benefit veterans, active service members and surviving spouses. With perks like no required down payment (for those with 100% of their loan guarantee benefit) and no private mortgage insurance, they’re a way of saying “thank you” on the home front.\n\n\n### Jumbo mortgages\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 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":1038,"content":1039},"How to qualify for a mortgage","Qualifying for a mortgage could be easier than you think. To get an idea of what you could afford, start by using our [Affordability Calculator](https://www.mortgage.com/calculators/affordability/). If your credit score or savings account need some attention, no sweat. Now you have a clear goal to work toward.\n\nWhen you know you can afford to buy a home, here are the next steps:  \n\n* **Get pre-approved:** 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 pre-approval can help you stand out from the crowd. With Citi,  you can apply to [get pre-approved](/home-loans/articles/how-to-get-pre-approved/) with our SureStart® Pre-Approval.   \n* **Get final approval:** 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. Citi makes it easy to move from pre-approval into the final approval stages.   \n* **Close on your loan:** This is the grand finale where you sign the official papers, handle last-minute details and take hold of those precious house keys. [Closing](/home-buying/articles/closing-on-a-house/) could be the longest part of the entire process if your search moved quickly.",{"title":1041,"content":1042},"How are interest rates set by lenders?","Interest rates may fluctuate often and are determined by a mix of factors, including: \n\n* Broad market conditions  \n* Type of loan  \n* Credit score  \n* Location   \n* Type of property   \n* Purpose of the loan   \n* Loan-to-value ratio  \n\nYou can set yourself up to secure better loan terms by  [improving your 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/). If interest rates happen to drop while you’re working on improving your financial profile, 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":1044,"content":1045},"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 a home loan that has an interest rate that 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. However, it 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, a shorter loan term is worth considering.",{"title":1047,"content":1048},"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 covers some interest and chips away at the principal, taking you one step closer to full ownership.\"}},{\"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 real estate tax and homeowners 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\":\"Interest rate is the cost of borrowing money from the lender, and it is represented as the percentage of extra money you’ll have to pay in order to borrow the loan.\"}},{\"column\":{\"valueOne\":\"Mortgage Note \",\"valueTwo\":\"These important contracts spell out all the essential terms of your loan.  Be sure to read it carefully so you know exactly what you’re signing up for. If you need help with understanding the terms, your lender will be happy to translate.\"}},{\"column\":{\"valueOne\":\"Loan Servicer \",\"valueTwo\":\"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":1050,"content":1051,"hideTitle":27},"Mortgage FAQs","::faq{headline=\"Mortgage FAQs\" :faqs='[{\"question\":\"What is a mortgage?\",\"answer\":\"A mortgage is a loan that helps you buy a home, and your property acts as collateral. It’s a contract 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. Your home is held as the collateral.\"},{\"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 and VA loans. FHA loans are often ideal for first-time buyers with lower credits scores or smaller down payments, while VA loans offer valuable benefits for veterans and active-duty service members. 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  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 pre-approval?\",\"answer\":\"Prequalification is a quick estimate of how much you might be able to borrow based on basic financial information you provide, while pre-approval involves a lender reviewing your financial stats in detail to formulate a specific loan amount. Pre-approval 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.\"}]'}\n::","2025-06-18T09:18:00.000Z","**Key insights:**\n\n* When buying a home, most people will use a mortgage loan, which allows them to pay for the home over time   \n* Your mortgage terms, such as interest rate and length, will depend on a variety of factors, including your credit score and the type of mortgage  \n* You can increase your likelihood of qualifying for better terms by boosting your credit score and comparing lenders  \n\nIf you’re considering buying a 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 buy property. Since homeownership is such a big step for many people, it’s important to know how a mortgage works. Let’s start with the mortgage basics.","What is a mortgage? Understanding home loans","2026-07-17T13:20:00.000Z",[594,635,749],{"introText":1005,"text":598,"to":599,"body":1058},"Let’s take the next step toward your new home.",{"title":1060,"description":1061},"What Is a Mortgage? How Home Loans Work & What to Expect | Mortgage.com"," A mortgage is a loan designed to help you buy property. We define mortgages, explain how they work and break down the 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",[646,765,650],{"_path":1067,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":826,"l1":594,"linkNav":1068,"heroMedia":1069,"teaserImage":1072,"slug":1074,"sections":1075,"date":1088,"subheadline":1089,"headline":1090,"isFeatured":6,"tags":1091,"link":1094,"seo":1097,"hasSectionNavigation":27,"_id":1100,"_type":78,"title":1101,"_source":80,"_file":1102,"_extension":78,"tagsDetails":1103},"/articles/home-loans/how-to-get-pre-approved-1",{"introText":597,"text":598,"to":599},{"landscape":1070,"portrait":1071},"/media/article-how-do-you-get-pre-approved-for-a-home-loan-mobile-768x512.jpg","/media/article-how-do-you-get-pre-approved-for-a-home-loan-desktop-520x638.jpg",{"src":1073},"/media/article-how-do-you-get-pre-approved-for-a-home-loan-teaser-500x500.jpg","how-to-get-pre-approved",[1076,1079,1082,1085],{"title":1077,"content":1078},"6 steps to mortgage preapproval ","First things first, what does mortgage preapproval actually mean? It’s a letter from lenders that tentatively tells you how much money they’ll let you borrow. And while it’s not a guarantee, it shows sellers and [real estate agents](/home-buying/articles/what-is-a-real-estate-agent) that you’re serious about buying a home. That stamp of approval helps your offer shine and can give you the edge you need to beat out other homeowners-to-be.  \n\nNow, let’s move on to how to get a mortgage preapproval. Here’s a quick guide to help make it happen.  \n\n### 1. Get your credit score\n\nYou’re going to want to know this number before you apply for preapproval. It shows lenders how reliable you are and plays a big part in what your [loan terms](/home-buying/articles/apr-vs-interest-rate) will look like. Remember, you’re hoping for a high number here. If your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house) is over 620, you’re in pretty good shape.  \n\n### 2. Check your credit history\n\nThe next step is to round up your credit report. Lenders take a look at this to see how you’ve managed money in the past, so they’ll be checking out whether you pay on time, if you have debts and how long you’ve been using credit. Be sure to go over everything with a fine-tooth comb. If something seems out of place, you’ll want to sort it out sooner rather than later to put a stop to any snags.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP \" text=\"You can score a free copy of your credit report from the three major credit bureaus, [Equifax](https://www.equifax.com/personal/credit-report-services/free-credit-reports/), [Experian](https://www.experian.com/consumer-products/free-credit-report.html) and [TransUnion](https://www.transunion.com), every 12 months.\"}\n::\n\n### 3. Find your debt-to-income (DTI) ratio\n\nNow it’s time to figure out your [debt-to-income ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio). Your DTI is a simple way to show how much money you owe each month compared to how much you make. To find it, you’ll add up your monthly debts, like credit card payments, and divide them by your gross monthly income. Lenders love lower ratios—think 36% or less. If your DTI is running higher, bring it down by boosting your income or paying off as much debt as you can. \n\n### 4. Pull together important info\n\nTo get preapproval for a home loan, you’re going to need to gather up documents so lenders can make sure all your information checks out. Go ahead and grab your: \n\n* **Proof of income:** You’ll want to track down pay stubs, tax returns and W-2 forms from the past two years. \n* **Proof of assets:** Your latest bank and investment account statements will help prove you can afford a down payment and other costs. \n* **Employee verification:** Recent pay stubs and employer contact info will help lenders confirm your job and income. \n* **The details on any debt:** Your lender needs a full look at your finances, so they’ll want to know about things like student loans, auto loans and credit cards.  \n\n### 5. Get in touch with your lender\n\nNow that you’ve got your paperwork squared away, you’re ready to reach out to your lender to go through the preapproval process for your [mortgage](/home-loans/articles/what-is-a-mortgage).   \n\n### **6. Time to apply for a mortgage preapproval**\n\nBe sure to confirm with the lender that you want a mortgage preapproval and not a pre-qualification. A preapproval comes with a loan commitment, and you’ll have the peace of mind knowing an underwriter has reviewed your loan request. A prequalification is based on verbal information you provide and does not have the level of underwriting that a preapproval does. This also helps boost your buying leverage and gives you an edge over other buyers who don’t have a firm preapproval commitment. \n\n \n\n\n::card{eyebrowIcon=\"\" body=\"Speak to your Citi Specialist about getting preapproved with a Citi SureStart® Pre-Approval. Unlike many preapprovals, it comes with a firm commitment to lend.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" headline=\"Ready to get preapproved?\" backgroundColor=\"\" icon=\"Homebuyer\" link=\"https://www.citi.com/mortgage/surestart-preapproval\" ctaText=\"Learn More\"}\n::\n\n::disclaimer-dialog{buttonCopy=\"Citi SureStart® Terms & Conditions\" :dialogCopy='\"## Citi SureStart® Terms & Conditions\\n\\nSureStart® Pre-Approval is a registered service mark of Citigroup Inc. Final commitment is subject to verification of information, receipt of a satisfactory sales contract on the home you wish to purchase, appraisal and title report, and meeting our customary closing conditions. There is no charge to receive a SureStart® Pre-Approval. However, standard application and commitment fees will apply for the mortgage loan application.\"'}\n::",{"title":1080,"content":1081},"Preapproval vs. prequalification","Both prequalification and preapproval can be helpful for home buyers, but they’re not quite the same thing. Let’s break down how the mortgage prequalification process is different from the preapproval process, so you can see which is the best fit for you.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Aspect \"},{\"value\":\"Prequalification \"},{\"value\":\"Preapproval \"}]' :rows='[{\"column\":{\"valueOne\":\"Definition \",\"valueTwo\":\"An initial evaluation of your creditworthiness based on self-reported financial data. \",\"valueThree\":\"A more thorough assessment involving an actual application and detailed verification of your finances. \"}},{\"column\":{\"valueOne\":\"Process \",\"valueTwo\":\"Quick and based mostly on the information you provide. \",\"valueThree\":\"Involves a formal application and credit check. \"}},{\"column\":{\"valueOne\":\"Documents Required \",\"valueTwo\":\"None or very basic financial information. \",\"valueThree\":\"Detailed financial documents such as W-2 forms, tax returns, bank statements, etc. \"}},{\"column\":{\"valueOne\":\"Time Taken \",\"valueTwo\":\"Usually fast, can be done over the phone or online. \",\"valueThree\":\"Takes longer due to the detailed scrutiny of financial documents. \"}},{\"column\":{\"valueOne\":\"Result \",\"valueTwo\":\"An estimate of how much you might be able to borrow. \",\"valueThree\":\"A specific loan amount that you are likely to be approved for. \"}},{\"column\":{\"valueOne\":\"Credibility \",\"valueTwo\":\"Less credible, as it does not involve a detailed analysis or credit check. \",\"valueThree\":\"More credible, often required by sellers to make an offer on a home. \"}},{\"column\":{\"valueOne\":\"Validity \",\"valueTwo\":\"Generally valid for a short period, often a few months. \",\"valueThree\":\"Typically has a set expiration date, usually 60 to 90 days after issuance. \"}}]'}\n::",{"title":1083,"content":1084},"When should you get preapproved for a mortgage?","It’s a good idea to start the preapproval process early on in your home buying journey—around a few weeks or months before you start [making offers](/home-buying/articles/how-to-make-an-offer). That gives you a chance to iron out any wrinkles in your credit history and gives you time to apply for preapproval.    \n\nOne thing to watch out for? Preapproval for a [mortgage](/home-loans/articles/what-is-a-mortgage) doesn’t last forever. Your letter is typically good for about 60 to 90 days, which means you only want to get preapproved if you’re serious about your search.  \n\nIf buying a new home takes longer than you thought, you can get your updated documents back together and go through the process again. As a silver lining, your lender will already have most of your info on file.",{"title":1086,"content":1087,"hideTitle":27},"Preapproval FAQs","::faq{headline=\"Preapproval FAQs\" :faqs='[{\"question\":\"Does mortgage preapproval affect your credit score?\",\"answer\":\"With preapprovals, lenders look at your credit report with what’s called a hard inquiry. That can cause a small dip in your credit score, but the ding should only be temporary.\"},{\"question\":\"How long will it take to get preapproved?\",\"answer\":\"Anywhere from a few days to a few weeks. Want to speed things up? Knock out any requests from your lender as quickly as possible and make sure that all your paperwork is in order before kicking the preapproval process into high gear.\"},{\"question\":\"What do you need for a mortgage preapproval?\",\"answer\":\"Your lender is going to want some personal information, including your Social Security number, along with paperwork like proof of income, bank account info and your recent tax returns and W-2s. \"},{\"question\":\"What’s the best way to get preapproved for a mortgage?\",\"answer\":\"Being prepared goes a long way. Before you start applying, get clued in on your credit score, credit history and DTI. After that, it’s time to put together your paperwork. By staying organized early in the process, you can get your best shot at preapproval and landing the keys to the home of your dreams.\"}]'}\n::","2024-09-13T11:47:00.000Z","When you start searching for your new home, a big part of finding the right place boils down to budget. You’ve got to balance the details you’re dreaming of with what fits your finances, and that’s where mortgage preapproval comes in. Getting that initial green light from lenders not only gives you a good handle on what you can afford, but it can also help you stand out to sellers. Let’s dive in.","How to get mortgage preapproval",[749,1092,1093],"real-estate-process","loan-process",{"introText":1095,"text":598,"to":599,"body":1096},"Want help snagging a preapproval?","We’re always here to help.",{"title":1098,"description":1099},"How To Get PreApproved For a Mortgage","Learn how to get preapproved for a mortgage. Understand steps to mortgage preapproval and prequalify for a home loan to start your home buying journey.","content:articles:home-loans:how-to-get-pre-approved-1.json","How To Get Pre Approved 1","articles/home-loans/how-to-get-pre-approved-1.json",[1104,1108,765],{"label":1105,"slug":1092,"seo":1106},"Real Estate Process",{"description":1107},"Learn more about real estate process with helpful articles, tools, and guides to support your homeownership journey.",{"label":1109,"slug":1093,"seo":1110},"Loan Process",{"description":1111},"Explore resources about loan process—including types, requirements, and how to choose the right mortgage option.",{"_path":1113,"_dir":594,"_draft":6,"_partial":6,"_locale":7,"readTime":1114,"l1":594,"linkNav":1115,"heroMedia":1116,"teaserImage":1119,"slug":1121,"sections":1122,"date":1133,"subheadline":1134,"headline":1135,"dateModified":1136,"isFeatured":6,"tags":1137,"link":1139,"seo":1142,"hasSectionNavigation":27,"_id":1145,"_type":78,"title":1146,"_source":80,"_file":1147,"_extension":78,"tagsDetails":1148},"/articles/home-loans/residential-mortgage-credit-report",4,{"introText":597,"text":598,"to":599},{"landscape":1117,"portrait":1118},"/media/article-what-is-a-residential-mortgage-credit-report-rmcr-_-mobile-768x512.jpg","/media/article-what-is-a-residential-mortgage-credit-report-rmcr-_-desktop-520x638.jpg",{"src":1120},"/media/article-what-is-a-residential-mortgage-credit-report-rmcr-_-teaser-500x500.jpg","residential-mortgage-credit-report",[1123,1126,1130],{"title":1124,"content":1125},"Residential mortgage credit report, defined","When you [apply for a mortgage](/home-buying/articles/apply-for-a-mortgage), lenders might look at your Residential Mortgage Credit Report (RMCR) to evaluate your creditworthiness as a borrower. This report provides a detailed overview of your credit history, including your credit scores, payment history, outstanding debts and any negative marks such as late payments, defaults or bankruptcies. Lenders start out by pulling your tri-merge report first.  \n\n::callout{title=\"What’s a tri-merge credit report? \" body=\"Think of this as a high level snapshot of your overall [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house). It pulls info from the three big credit bureaus—Experian, TransUnion and Equifax—into one handy report. Each bureau might have slightly different stats on you, so a tri-merge offers a good general overview.\" :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::\n\nUnderwriters use the middle score of your tri-merge credit report, or if you're applying with a partner, the lowest middle score of the two borrowers on the application. \n\nLet's simplify this with an example involving two individuals, John and Dave:\n\n::inline-table{tableLayout=\"waffle\" :headers='[{\"value\":\"Credit Bureau \"},{\"value\":\"John\"},{\"value\":\"Dave\"}]' :rows='[{\"column\":{\"valueOne\":\"Equifax\",\"valueTwo\":\"620\",\"valueThree\":\"720\"}},{\"column\":{\"valueOne\":\"TransUnion\",\"valueTwo\":\"771\",\"valueThree\":\"771\"}},{\"column\":{\"valueOne\":\"Experian\",\"valueTwo\":\"667\",\"valueThree\":\"714\"}}]'}\n::\n\nIn John's case, the middle score is 667 from Experian, so lenders will primarily use this score when evaluating his application. \n\nFor Dave, the middle score is 720 from Equifax, so this will be the score lenders use for him.\n\nWhen applying together for something like a loan, the score used will be the lower middle score between the two applicants. In this case, it would be John's 667. \n\nWhen assessing their application, debts from both John and Dave will be considered, regardless of whether both are occupying the property or if one is just a co-signer.\n\nA residential mortgage credit report (RMCR) goes a step further. It's not just a blend of the three reports but takes a close look at each of them. For instance, if there are differences between the bureaus' reports, the RMCR will explain why. It might also check employment and housing history to give lenders a clearer view of a borrower’s total financial picture.",{"title":1127,"label":1128,"content":1129},"When do credit reports come into play in the mortgage process? ","When do credit reports come into play? ","Credit reports for a mortgage start out light and get heavier as you get closer to that stamp of approval. Here’s what to expect as you go through the process: \n\n* **Application stage:** Right off the bat, when you fill out a [mortgage application](/home-buying/articles/apply-for-a-mortgage), the lender will pull a credit report to peek into your financial history. This is the tri-merge we talked about, which gives the lender a summary of your [credit standing](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house). \n* **Further review:** If things look good and you move forward, the lender will request an RMCR. This is especially useful if you're [self-employed](/home-buying/articles/mortgage-self-employed/) or have a few dings on the credit roster as the RMCR helps lenders get the full story. \n* **Final approval:** Before giving the final thumbs up, your lender will use the details in the RMCR to make sure everything looks a-okay. It's their way of double-checking their risk before handing over the house keys. Fair enough.",{"title":1131,"content":1132},"What if I need to improve my credit?","Let's face it, not everyone has a [credit score](/home-loans/articles/how-to-buy-a-house-with-bad-credit) that’s above 800. If your score looks a bit rough around the edges, don't beat yourself up. You're not alone and you can improve that score until it meets qualification criteria. Here’s how you can start turning things around:  \n\n* **Check for errors:** Yup, even credit bureaus make mistakes. So, grab a copy of your credit report and review it like a hawk. Sometimes, you'll find errors and, just like a typo on your resume, you'll want to correct it before it hurts your reputation. Incorrect information can drag down your score while fixing errors can give it a boost.  \n* **Pay down debt:** If your credit cards are screaming under the weight of high balances, it's time to ease their burden. Set yourself up with a budget and stay the course until balances are below 30% of your credit limits.  \n* **Keep old accounts open:** You might think closing an old credit account could improve your financial image, but it's actually the opposite. Think of your old accounts like fine wine—the longer it's been around, the better. Keeping them open can help lengthen your credit history, which is a plus in the eyes of credit scorers. \n\nRemember, improving your credit is a journey, not a sprint. It takes patience, persistence and a bit of financial elbow grease. With some effort, you could be on your way to an \"excellent\" rating and closer to making big dreams come true.\n\nSo, there you have it—a simple breakdown of what a residential mortgage credit report is and why it matters when you're in the housing market. But remember, good credit can do more than just open doors to dream homes. It can help pave the way for better loan [rates](/rates) and even new car purchases. In short, good credit says you're a reliable human (which you most certainly are.)  \n\nIn short, good credit helps show you are a reliable borrower.","2024-09-11T11:51:00.000Z","As a [first-time home buyer](/home-buying/articles/first-time-home-buyer) you may hear about a residential mortgage credit report—RMCR for short. So, where does this come into play and how can you use it to your advantage? We’ll break it down so you can put your best financial foot forward.","What's a residential mortgage credit report?","2026-05-14T10:00:00.000Z",[1093,749,1138],"credit-score",{"introText":1140,"text":598,"to":599,"body":1141},"Ready to hit the housing market? ","We'll be right by your side.",{"title":1143,"description":1144},"Residential Mortgage Credit Reports (RMCR) Explained","Discover what a Residential Mortgage Credit Report (RMCR) is and how it differs from other reports. Understand its role in the mortgage approval process.","content:articles:home-loans:residential-mortgage-credit-report.json","Residential Mortgage Credit Report","articles/home-loans/residential-mortgage-credit-report.json",[1108,765,1149],{"label":1150,"slug":1138,"seo":1151},"Credit Score",{"description":1152},"Understand how your credit score impacts your ability to qualify for a home loan and how to improve it.",1785187496995]