How to Get an Affordable Mortgage

A mortgage is likely to be the largest loan you take out over the course of your lifetime. Since a mortgage term can last up to 30 years, it makes sense to find one that is affordable. Here are some simple tips to keep in mind when seeking an affordable mortgage:

Be Realistic About What You Can Afford

To avoid the possibility of foreclosure, it’s important to be realistic about your earnings and how much you can afford to pay on a monthly basis. To assess your borrowing capacity, in addition to your credit score, mortgage lenders use what’s known as the “28/36 Rule.” This basically states that a household should spend no more than 28% of its gross monthly income on housing, and no more than 36% on total debt service. Use a mortgage calculator to help determine how much you can comfortably afford and whether it falls within the 28/36 Rule.

Make a Larger Down Payment

Many mortgage lenders typically require a down payment of 20% of the purchase price of the property. If you are able to make a larger down payment, this could effectively lower the amount of your monthly mortgage payments. In some cases, a larger down payment could also help you get offered a lower interest rate on your loan. If you’re unable to make a down payment of 20% or greater, you may be able to qualify for a government-secured FHA loan, which would typically require lower minimum down payments and credit scores than many conventional loans.

Aim for a Good to Excellent Credit Score

Borrowers of conventional home loans usually need at least a score of 620 to have a chance for approval. Aiming for a credit score in the “good to excellent” range — generally over 700 — will increase your likelihood of approval, in addition to offering you better loan terms. The higher your credit score is, the better mortgage terms you will be offered. This can make a huge difference in the long term, as just a few tenths of a point off the interest rate can greatly lower the amount of interest paid over the life of the mortgage.

Shop Around for the Best Terms

Home loans are available from several types of lenders — commercial banks, thrift institutions, mortgage companies, and credit unions. They can also be secured through a mortgage broker. Lenders and brokers may offer different prices for the same loan terms to different consumers, even if those consumers have the same loan qualifications. As a result, you should contact several lenders to ensure you’re getting the best deal.


  1. Steven Ludwikowski on January 15, 2018 at 6:14 pm

    Thank you for your knowledge.

  2. Alex on January 29, 2018 at 6:03 pm

    How u can help ..? And I wanna buy the house I’m not good credit so

  3. donna marshall on January 31, 2018 at 3:02 pm

    how can i get help

  4. Roberta Lynne Sherwood on February 12, 2018 at 5:46 pm

    I don’t have the best credit…but NEED a home. Can you help?

  5. Lucille Robinson on February 28, 2018 at 5:22 pm

    How do I get a lower mortgage payment with a 560 credit score. Everyone I talk to says it can’t be done because I need at least a 580. I got a month behind and am always receiving threatening letters. Can you help me?

  6. gary myers on March 3, 2018 at 6:19 pm

    what is pmi ,di i have to pay it

    • Jessica S. on March 14, 2018 at 4:10 pm

      Hi Gary,

      Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be required to pay for if you have a conventional loan. PMI protects the lender if you stop making payments on your loan.

      PMI is arranged by the lender and provided by private insurance companies. It is usually required when you make a down payment of less than 20 percent of the purchase price. If you’re refinancing with a conventional loan and your equity is less than 20 percent of the value of your home, PMI is also usually required.

      I would recommend contacting your lender for more information. I hope this information is helpful.

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