What is private mortgage insurance (PMI)?

PMI is typically required if you put down less than 20% on a conventional loan. It’s insurance that protects the lender if you default on the loan. While PMI doesn’t protect you, it can be added to your monthly mortgage payment. Once your loan balance drops below 80% of the home’s value, you can typically cancel PMI.

How does my credit score impact buying a home?

Your credit score plays a key role in determining your loan eligibility and the interest rate you’ll receive. Generally, the higher your score, the better your interest rate and loan terms. For conventional loans, a score of 620 or higher is typically needed, though programs like FHA loans are more flexible with lower credit scores, typically 580 or higher but there are options for lower scores as well. It’s a good idea to check your credit report and improve your score if needed before applying for a loan but we can always take a look at your scores put a plan together to buy in the future.

Can I buy a home with student loans or other debt?

Yes, you can still buy a home with student loans or other debt, but your debt-to-income (DTI) ratio will be considered when applying for a mortgage. Lenders use your DTI to assess your ability to repay the loan. If your DTI is too high, you may need to reduce your debt or save for a larger down payment to qualify for a loan.