Mortgage Qualification Calculator
Will you qualify for a mortgage? Enter your income, debts, and credit score to see your estimated approval amount and interest rate.
The Three Pillars of Mortgage Qualification
Lenders evaluate three main factors: income, credit, and debt. Income determines how much you can afford. Credit determines your interest rate and whether you're approved at all. Debt determines how much of your income is already spoken for.
Income must be stable and verifiable. Lenders want two years of W-2s or tax returns proving consistent earnings. A recent job change in the same field is fine, but switching careers can complicate approval. Bonuses, overtime, and commissions count only if you've received them consistently for two years.
Credit score is the gatekeeper. Below 620, you're looking at FHA or manual underwriting with higher rates. Between 620 and 700, you qualify but pay above-average rates. Above 740, you get the best rates and easiest approvals. Every 20-point improvement can save 0.25% on your rate, which is thousands over 30 years.
How Credit Score Affects Your Rate and Approval
A borrower with a 780 score might get a 5.75% rate, while someone with a 640 score gets 6.75%. On a $300,000 loan, that 1% difference costs an extra $193 per month, or $69,000 over 30 years. Credit score is expensive.
If your score is below 700, consider delaying your home search for 6-12 months while you improve it. Pay down credit card balances below 30% of limits, make all payments on time, and dispute any errors on your report. A 40-point improvement can save you enough to justify waiting.
Lenders also look at credit history length and types of accounts. Someone with a 720 score but only two years of history might get less favorable terms than someone with a 700 score and 10 years of diverse credit. The algorithm rewards experience and stability, not just the number.
Pre-Qualification vs. Pre-Approval
Pre-qualification is an estimate based on what you tell the lender. It's fast, usually free, and doesn't involve a credit check. It's useful for early planning but doesn't carry much weight with sellers.
Pre-approval means the lender verified your income, assets, and credit. They ran a hard credit inquiry and reviewed your financial documents. A pre-approval letter tells sellers you're a serious buyer who can actually close. In competitive markets, offers without pre-approval are often ignored.
Get pre-approved before you start house hunting. It shows you the exact amount you qualify for, not just an estimate. You'll also lock in your rate for 60-90 days, which protects you if rates rise while you're shopping. The process takes 2-5 days and costs nothing upfront.
Frequently Asked Questions
What credit score do I need to qualify?
Conventional loans typically require 620 minimum. FHA loans accept scores as low as 580 with 3.5% down, or 500 with 10% down. The higher your score, the better your rate.
How accurate is this qualification estimate?
This gives a general range based on standard lending criteria. Actual approval depends on employment history, assets, property appraisal, and lender-specific rules. Get pre-approved for exact numbers.
Can I qualify with less than 20% down?
Yes. Conventional loans go down to 3%, FHA to 3.5%, and VA/USDA to 0%. Lower down payments require mortgage insurance, which increases your monthly cost.
What if my income varies?
Lenders average your income over two years for W-2 employees. Self-employed borrowers use two years of tax returns. Bonuses and commissions count if you have a two-year history of receiving them.
Does this calculator consider property taxes and insurance?
No, this estimates loan amount only. Actual PITI (principal, interest, taxes, insurance) may be 20-30% higher than principal and interest alone. Budget accordingly.