How to Qualify for a Mortgage + Free Calculator

Buying a home starts with understanding how lenders decide what you can afford. This guide explains—in plain language—what most lenders look for in terms of income, debt, credit, and down payment. After you review the basics, use the mortgage calculator below to estimate a monthly payment and see what fits your budget.

Income & Debt-to-Income Ratio (DTI)

Lenders qualify you based on your gross monthly income (the amount before taxes and deductions). For retirees, that usually includes Social Security, pension, and any other steady income (like annuities or part-time work).

They’ll compare that income to your monthly debts—credit cards, auto loans, and the new mortgage payment—to calculate your debt-to-income ratio (DTI).

  • Most programs want your total debts, including the new mortgage, to be at or under ~45% of your gross income.
  • If your income is fixed, keeping other debts low can make qualifying easier.

Credit & Debt History

Your credit report and score affect both approval and interest rate. A record of on-time payments and low balances helps.

Check your credit reports for free at AnnualCreditReport.com. This is not a hard inquiry and won’t impact your score. Fix any errors before you apply.

Down Payment & Closing Costs

Typical minimums: 3%–5% down for conventional loans or 3.5% for FHA. Plan for ~2%–4% of the purchase price in closing costs.

Down Payment Assistance (DPA) may help, but most programs have income limits, credit minimums, and often require a small buyer contribution. It’s smart to have at least some funds available for out-of-pocket expenses.

Estimate Your Monthly Payment

Mortgage Calculator

Amount of Loan
Annual Interest Rate
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Term of Loan
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Does not include any taxes or fees.
Please consult a financial professional.

Next Steps

  • List your monthly income and all recurring debts.
  • Review your credit reports and correct any errors.
  • Ask about DPA programs if you need help with your down payment.

If you’d like an introduction to a local loan officer (including ones familiar with DPA and retirement income), I’m happy to connect you.