That answer depends on how you answer other questions. Let’s examine how those answers can help you find the mortgage program that’s best for you.

How much house can you afford?

This is a big one. Thankfully, you’ve got help. An affordability calculator can provide an estimate.

As a rule of thumb, keep housing costs between 25% and 30% of your pre-tax income. To figure that out, you’ll want to review your finances. Account for everything, from debts (such as student loans and car payments) to expenses (from utility bills to food and childcare) and savings.

What’s your savings situation?

Buying a home often requires significant savings. First, there’s the down payment. First-time homebuyers put down 9% on average in 2024. If that’s too high for you, you might consider an FHA loan, which could require a down payment as low as 3.5%. VA loans often require no down payment.

Second, there are closing costs, which are usually between 2% and 5% of the loan amount. While you could finance them, many people pay closing costs out of pocket.

What are the main mortgage types?

● Conventional Loans. Not backed by the government and with fixed or variable interest rates, conventional loans are the most popular. In 2024, 66% of home buyers chose conventional mortgages for financing.

While requirements vary, you may need a FICO score above 600, a 3% minimum down payment, and a debt-to-income ratio (DTI) below 45% to qualify for a conventional loan.

● Government-Insured Loans. The most popular are FHA loans, chosen by 29% of first- time buyers in 2024. You may qualify for an FHA loan with a credit score as low as 580 (with 3.5% down) or even 500 (with 10% down).

In 2024, 9% of first-time buyers chose government-sponsored VA loans, which can require a minimum credit score of 620.

● Jumbo Loans. These are usually for high-value homes and loan amounts that exceed the requirements of Freddie Mac and Fannie Mae. To qualify, you may need to put 10% down and have a credit score above 700.

Do you have specific needs?

Thinking of buying a fixer-upper? If so, a home renovation loan may be best for you. Have you considered building a home? With a One Time Close Construction loan it’s easier than you may think.

Speaking with a mortgage professional is one of the best ways to determine which mortgage program is right for you. We can help you there. Contact a member of the Decker Group at  (972) 591-3097 or connect with us online.