Find out where you really stand on the path to buying your first home. We'll check your DTI, savings, credit, and give you a clear action plan.
DTI Ratios
Lenders want front-end ≤28%, back-end ≤43%
You Can Afford
$253,000
Based on 28% DTI rule
Down Payment Scenarios
$2,750 short
$8,000 short
$25,500 short
$60,500 short
Months to Save (at $500/mo)
3.5% (FHA)
6 mo
5%
16 mo
10%
51 mo
20%
121 mo
Loan Eligibility
FHA
Eligible
3.5% min down
Conventional
Eligible
5% min down
Est. Monthly Payment (5% Down)
Rent vs. Own
Current Rent
$1,500
Est. Mortgage
$2,851
$1,351/mo more than rent — but you're building equity
Keep running the numbers
Know where you stand. Here’s what to explore next.
Mortgage approval comes down to four pillars: debt-to-income ratio (DTI), credit score, down payment, and employment history.
DTI is your monthly debt payments divided by gross monthly income. Front-end DTI only counts housing costs. Back-end includes all debts. Most lenders want back-end DTI under 43%, though some FHA programs allow up to 50%.
Credit score determines your rate and loan options. 760+ gets the best rates. 620 is the conventional loan minimum. 580 qualifies for FHA with 3.5% down.
Down payment shows skin in the game. More down = lower monthly payment + no PMI at 20%. But you don't need 20% to get started.
Employment — most lenders want 2 years of steady income. Self-employed borrowers typically need 2 years of tax returns.
FHA loans are backed by the government and are designed for first-time buyers. Minimum credit score is 580 with 3.5% down (500 with 10% down). The catch: you pay mortgage insurance (MIP) for the life of the loan, adding 0.55–0.85% to your annual costs.
Conventional loans require 620+ credit and typically 5% minimum down. You pay PMI until you reach 20% equity, then it drops off — a significant advantage over FHA for long-term cost.
The right choice depends on your credit and savings. If your score is below 620, FHA is your path. If it's above 720 with decent savings, conventional will likely save you money over time.
If the numbers don't work for a traditional purchase, don't give up. There are creative paths to homeownership:
House hacking — Buy a duplex, triplex, or fourplex with an FHA loan (3.5% down). Live in one unit, rent the rest. Your tenants help cover the mortgage. Many house hackers live for free or near-free. Run the house hack numbers →
ADUs — Some areas let you build an accessory dwelling unit on your property and rent it out, turning a single-family home into an income property.
Modular/manufactured homes — Modern modular homes can cost 10–20% less per square foot than site-built, with FHA and conventional financing available.
Not ready yet — but that doesn't mean never. Here's a 6–12 month game plan:
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