Mortgages don’t have to feel complicated. Below you’ll find simple explanations of the key terms and factors that affect how much you can borrow, what your payments look like, and how to make the best choice for your future.
A good rule of thumb is that you can afford a mortgage worth about 2 to 3 times your annual income.
Another way to check affordability is using the 28/36 rule: No more than 28% of your gross monthly income should go toward your mortgage payment.
No more than 36% should go toward all debts combined (mortgage, car, student loans, credit cards). This helps you avoid becoming “house poor” - where your mortgage leaves little room for savings, travel, or unexpected expenses.
Your deposit is the amount you pay upfront toward your home.
Why it matters: The larger your deposit, the smaller your loan - which means lower monthly payments and less interest over time.
20% is the benchmark: Putting 20% down often lets you avoid private mortgage insurance (PMI).
Smaller deposits are possible: Some loan programs allow as little as 3–5% down, but this usually increases your long-term costs.
Your interest rate is the cost of borrowing money, and it directly impacts your monthly payment.
A higher credit score usually earns you a lower interest rate, saving you thousands over the life of your loan. Even a small difference - say 6.5% vs. 7% - can add up to tens of thousands of dollars over 30 years.
Tip: Check your credit report early and fix any errors before applying for a mortgage.
Not all lenders are the same. Each may offer different loan products, rates, and qualification requirements. When comparing lenders, look at:
Interest rates - fixed vs. variable.
Loan options - conventional, FHA, VA, USDA, etc.
Closing costs and fees - these can vary widely.
Flexibility - some lenders are better at working with first-time buyers or self-employed applicants.
Your loan term (how long you’ll repay your mortgage) shapes both your monthly payments and the total cost of your home.
15-Year Mortgage: Higher monthly payments, but you’ll pay off your home faster. Best for buyers with stable income who want to save money on interest.
20-Year Mortgage: A middle ground between shorter and longer terms. Payments are more manageable than a 15-year but less costly over time than a 30-year.
30-Year Mortgage: Lower monthly payments, giving you more budget flexibility. Best for first-time buyers or those who want to keep extra cash free for other expenses.
Numbers only tell part of the story. A trusted real estate agent helps you: Understand the financial side of buying a home in plain language.
Get connected to reliable local lenders who can offer competitive rates. Navigate offers, negotiations, and paperwork with confidence.
Find a home that not only fits your budget but also your lifestyle.The right guidance can make all the difference - especially when it comes to your biggest investment.
Get pre-approved early - it shows sellers you’re serious and gives you a clear budget.
Save more than just your down payment - set aside funds for closing costs, moving, and an emergency cushion.
Don’t max out your budget - leave room for life’s surprises and future plans.
Think long term - choose a home that will still work for you 5–10 years down the line.
Work with trusted professionals - from realtors to lenders and inspectors, the right team keeps you protected.
