Your Loan Questions, Answered.

A mortgage is a loan used to purchase or refinance real estate, where the property itself serves as collateral. The borrower agrees to make monthly payments over a set term (typically 15 or 30 years) until the loan is repaid.

Key components of a mortgage include: Principal (the amount borrowed), Interest (the cost of borrowing), Taxes, and Insurance ??? collectively known as PITI.

The minimum credit score depends on the loan type:

• FHA Loan: 500 minimum (580+ for 3.5% down)
• VA Loan: No official minimum (lenders typically require 620+)
• Conventional: 620 minimum
• Jumbo: 700+ typically required

Higher credit scores get better interest rates, which can save tens of thousands over the loan life.

Your maximum loan amount depends on several factors:

• Debt-to-Income (DTI) ratio: Most lenders want your total monthly debt (including new mortgage) below 43-45% of gross monthly income
• Credit score: Higher scores unlock larger loans
• Down payment: Larger down payments reduce the loan needed
• Conforming loan limits: $766,550 for most areas in 2024

Use our Affordability Calculator for a personalized estimate.

Interest Rate is the cost of borrowing the principal loan amount. APR (Annual Percentage Rate) includes the interest rate PLUS additional fees (origination fees, mortgage points, mortgage insurance), giving you the true cost of the loan.

APR is always equal to or higher than the interest rate. Use APR to compare loans from different lenders ??? it is a more accurate cost comparison tool.