What credit score do I need to buy a house?

FHA loans require a minimum 580 credit score with 3.5% down (500-579 with 10% down). Conventional loans require 620+. VA and USDA loans typically require 640+. The best rates go to borrowers with 740+ scores.

How much income do I need to qualify for a $400,000 mortgage?

On a $400,000 home with 20% down and 7% rate, the mortgage payment plus taxes and insurance is about $2,679/month. Divided by 28%, you need approximately $9,568/month or $115,000/year in gross income with no other monthly debts.

What debts count against my mortgage qualification?

Lenders count all monthly debt obligations: car loans, student loans (even in deferment), credit card minimums, personal loans, alimony, and child support. Utilities, cell phone bills, and subscriptions are not counted.

What is the difference between pre-qualification and pre-approval?

Pre-qualification is a quick estimate based on self-reported information with a soft credit pull. Pre-approval involves verified documents (pay stubs, tax returns, bank statements) and a hard credit pull. Sellers take pre-approval letters far more seriously.

Can I count my spouse's income if they have bad credit?

If your spouse's income is needed to qualify, they must be on the loan — which means their credit score affects your rate. If your income alone qualifies, consider applying solo and adding your spouse to the title separately to avoid the credit score impact.

How can I quickly improve my chances of qualifying?

Pay down credit card balances below 30% utilization (improves score in 30-45 days), pay off small collections, avoid opening new accounts for 6 months before applying, and request a credit limit increase to lower your utilization ratio.

Home / Mortgage Pre-Qualification Calculator

✅ Mortgage Pre-Qualification Calculator

Check your approval odds and maximum loan amount based on income and debts

Quick Overview

Who Should Use This

First-time homebuyers before meeting with a lender, buyers wanting to know their price range before house hunting, and anyone curious whether they'd qualify for a mortgage.

Purpose

Estimate your maximum loan amount and purchase price based on income, debts, and credit score using standard lender qualification guidelines.

Example

$8,000/month gross income, $500/month debts, 720 credit score, 10% down → pre-qualifies for ~$420K loan, $467K home at 6.75% (payment: $2,178/month).

Your Details

💡 First-Time Buyer Tip: Lenders use the 28/43 rule: Housing costs ≤ 28% of gross income, total debts ≤ 43% of gross income.

Pre-Qualification Results

Maximum Home Price

Likely to be approved

Maximum Loan Amount

Estimated Monthly Payment

Principal, interest, taxes, insurance

DTI Analysis

Gross Monthly Income$0

Current Monthly Debts$0

Max Housing Payment$0

Current DTI Ratio0%

DTI with New Mortgage0%

Credit Score Impact

Interest rates by credit score (on $300K loan):

Excellent

6.25%

$1,847/mo

Very Good

6.50%

$1,896/mo

Good

7.00%

$1,996/mo

Fair

7.75%

$2,146/mo

Documents Needed

✓ Last 2 years W-2s

✓ Last 2 pay stubs

✓ Last 2 months bank statements

✓ Photo ID (driver's license)

✓ Social Security number

✓ Proof of additional income (if applicable)

✓ Gift letter (if using gift funds)

✓ Rental history (12-24 months)

Pre-Qualification vs. Pre-Approval: Know the Difference

Pre-qualification is a lender's preliminary estimate of how much you might borrow, based on self-reported income, debts, and assets without a hard credit pull. It is a useful planning tool but carries no weight with sellers. Pre-approval is a conditional commitment backed by verified documentation — pay stubs, tax returns, bank statements — and a hard credit inquiry. A pre-approval letter significantly strengthens your offer in competitive markets.

This calculator replicates the pre-qualification analysis lenders run internally, using standard DTI guidelines, credit score impacts, and loan program thresholds. The results give you a realistic estimate before you speak with a lender, so you can shop with confidence and negotiate from a position of knowledge.

What Lenders Evaluate

Mortgage lenders evaluate five factors — sometimes called the "Five C's of Credit": Capacity (DTI ratio and income stability), Capital (down payment, reserves, assets), Credit (score, history, payment behavior), Collateral (the home's appraised value vs. loan amount), and Character (employment history, stability of income). This calculator focuses on the most quantifiable factors: capacity and capital.

How to Strengthen Your Pre-Qualification Position

If your pre-qualification results are lower than expected, there are concrete steps to improve your position before applying:

Increase your down payment: A larger down payment reduces LTV and improves approval odds, especially for borderline credit scores
Pay off installment debt: Eliminating a car payment or personal loan directly reduces your back-end DTI
Improve your credit score: Paying credit card balances below 30% of the limit can raise your score 20–50 points within 30–60 days
Document all income: Self-employment income, rental income, alimony, and investment income can all be counted with proper documentation
Avoid new credit: New inquiries and new accounts before application can lower your score and raise lender concerns

Loan Program Options

Conventional loans (backed by Fannie Mae/Freddie Mac) require a minimum 620 credit score and 3% down. FHA loans allow scores as low as 580 with 3.5% down, and 500–579 with 10% down. VA loans (veterans and active military) require no down payment and no minimum credit score (though most VA lenders require 620+). USDA loans offer 100% financing for eligible rural and suburban properties.

For First-Time Buyers

Understanding Pre-Qualification

Everything you need to know before talking to lenders

🎯

What is Pre-Qualification?

Pre-qualification is a lender's estimate of how much you can borrow based on self-reported income and debts. It's free, quick (10-15 minutes), and doesn't affect your credit score.

📋

Pre-Qual vs Pre-Approval

Pre-qualification is informal and unverified. Pre-approval requires documents, credit check, and lender verification. Sellers take pre-approval seriously; pre-qual letters have little weight.

💳

The 28/43 Rule

Front-end ratio: Housing costs ≤ 28% of gross income. Back-end ratio: All debts including mortgage ≤ 43% of gross income. Some programs allow up to 50% DTI.

📊

Credit Score Matters

Every 20-point increase in credit score can save 0.25-0.5% on your rate. On a $400K loan, that's $50-100/month savings. Aim for 740+ for best rates.

💰

What Counts as Debt

Include: car loans, student loans, credit card minimums, personal loans, alimony, child support. Don't include: utilities, groceries, gas, Netflix, phone bills.

⚡

Quick Improvements

Pay off small debts to reduce DTI. Pay down credit cards below 30% utilization. Don't open new credit cards. Get added as authorized user on old account with perfect history.

Common Questions

Pre-Qualification FAQ

Minimum scores by loan type:

FHA: 580 minimum (3.5% down), 500-579 requires 10% down
Conventional: 620 minimum, but 740+ gets best rates
VA: No official minimum, but most lenders want 620+
USDA: 640 minimum for automated approval

Credit score impact on rates (on $300K loan):

760+: 6.25% = $1,847/month
700-759: 6.75% = $1,946/month (costs $99/mo more)
660-699: 7.25% = $2,047/month (costs $200/mo more)
620-659: 8.00% = $2,201/month (costs $354/mo more)

Action items: If below 740, spend 3-6 months improving before buying. Pay off collections, reduce credit card balances to under 30%, dispute credit report errors.

Quick calculation using 28/43 rule:

On a $400K house with 20% down ($80K), your loan is $320K. At 7% interest:

Monthly P&I: $2,129
Property tax (1.2%): $400/mo
Insurance: $150/mo
Total housing payment: $2,679/mo

Income needed: $2,679 ÷ 0.28 = $9,568/month = $115,000/year

If you have existing debts:

$500/mo car payment = need $107K/year income
$300/mo student loans = need $110K/year income
Both = need $125K/year income

With FHA (3.5% down): Need about $100K/year due to higher interest and PMI

Debts that COUNT toward DTI:

Mortgage or rent payments
Auto loan/lease payments
Student loan payments (even if deferred)
Credit card minimum payments
Personal loans
Home equity loans/HELOCs
Alimony or child support paid
Other mortgage/rental property payments

Debts that DON'T COUNT:

Utilities (electric, water, gas)
Phone bills
Car insurance
Health insurance
Groceries and food
Subscription services (Netflix, gym)
401(k) contributions

Special cases:

Student loans in deferment: Lender uses 0.5-1% of balance as monthly payment
Business credit cards: Only counts if personally guaranteed
Authorized user on someone else's card: Usually doesn't count if you can prove you don't pay it

Yes, but it's complicated:

Both on the loan (recommended if both have decent credit):

Combine both incomes for higher buying power
Lender uses lower of the two credit scores for rate
Both people's debts count in DTI

Only one person on loan (if one has bad credit):

Only that person's income counts
Only that person's credit score matters
But spouse's debts still count in DTI (in community property states)

Example scenario:

Person A: 780 credit, $80K income, $200/mo debts
Person B: 620 credit, $60K income, $800/mo debts

Option 1 - Both on loan: $140K combined income, but 620 credit = 8% rate
Option 2 - Only A on loan: $80K income, 780 credit = 6.5% rate

Often better to use just the high-credit spouse, then refinance later to add the other person after improving their credit.

Immediate actions (this week):

Pay off small debts: Paying off a $200/mo debt can increase buying power by $40K-50K
Pay down credit cards below 30%: Can boost score 20-50 points in 30 days
Become authorized user: On parent's old card with perfect history (adds to your credit age)
Don't apply for new credit: Each application drops score 5-10 points

Short-term improvements (1-3 months):

Pay off collections: Boost score 30-50 points
Dispute credit errors: 30% of reports have errors
Pay down cards to $0: Maximum score boost
Set up auto-pay: Ensure no late payments

Example impact:

Starting: $70K income, $700/mo debts, 680 credit = Qualify for $280K home

After improvements: $70K income, $300/mo debts, 740 credit = Qualify for $350K home

Gained $70K in buying power!

Pre-Qualification (soft check):

Time: 10-15 minutes online
Documents: None required
Credit impact: None (no credit pull)
Accuracy: Rough estimate only
Use: Personal planning, deciding if you're ready
Seller value: No weight at all

Pre-Approval (hard check):

Time: 1-3 days for full approval
Documents: W-2s, pay stubs, bank statements, tax returns
Credit impact: Yes (hard pull, drops score 5-10 points temporarily)
Accuracy: Exact loan amount you can get
Use: Required for house hunting, making offers
Seller value: Strong - shows you're a serious, qualified buyer

When to get each:

Pre-qualify first (now) - See if homebuying is realistic
Improve finances (1-6 months) - Based on pre-qual results
Pre-approve (when ready to shop) - Get pre-approval 60-90 days before house hunting
Make offers - Include pre-approval letter with every offer

Pro tip: Get pre-approved by 2-3 lenders to compare rates, then choose the best one.

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