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Buying a house with no money down gets you on the path to home ownership much faster than saving up for a large down payment. After all, the average sales price of a home in the U.S. in early 2025 is $503,800; a traditional 20% down payment at that price point would top $100,000!

For the smoothest path to the closing table with a no-money-down loan, you may not need a lot of cash, but you do need a credit score of at least 600. Here’s everything you need to know about what credit score is needed to buy a house with no money down.

Can You Buy a House With No Money Down?

It’s possible to buy a house with no money down, but you’ll need to meet the eligibility requirements that come with certain types of mortgage loans or search for alternative programs that help keep your upfront costs to a minimum. You’ll also need to know what credit score is needed to buy a house with no money down, which can vary based on the type of loan and lender — more details on that below.

Note: SoFi does not offer a zero-down mortgage at this time.

What Is a Zero-Down Mortgage?

Typically, lenders require a down payment on a mortgage, whether you’re buying your first home, taking out a jumbo loan for a luxury property, or getting something in between. The down payment gives you automatic equity in the home, and lowers the lender’s risk since you have a financial investment in the home.

With a zero-down mortgage, also known as a no-down-payment mortgage, you take out a loan for the home’s full purchase price, instead of paying for part of it in cash. As the cost of living in the U.S. increases, this can help you buy a home faster than if you waited to save up a down payment.

How to Buy a House With No Money Down

There are a few different options to explore in order to buy a house with no money down.

Get a Zero-Down Home Loan

There are two primary types of zero-down home loans for first-time buyers, but you’ll need to meet mortgage preapproval requirements.

VA loans are backed by the federal government and designed specifically for veterans, military members, and surviving spouses. You don’t have to make a down payment and won’t have to pay private mortgage insurance. You do, however, need to meet the lender’s requirements for credit and income. Most lenders will be looking for a credit score of 620 for a VA loan, although some may allow a lower score. The higher the loan amount, the more strict a lender’s credit-score threshold may be.

USDA loans, also backed by the government, provide 100% financing for properties located in an eligible zone. The credit score needed for a USDA loan will vary based on the lender. A score of 640 or better is a baseline for many lenders, but even those with lower scores may qualify if they provide additional supporting documents for their application. (Note: SoFi does not offer USDA loans, although it does provide VA loans.)

This option isn’t solely for qualified first-time buyers, but USDA loans come with income limits that may be easier to meet if you’re earlier in your career and home-buying journey. Your income can’t exceed 115% of the area’s median household income. The maximum income level varies depending on family size, since the average monthly expense for one person is less than a family with multiple kids. You can search the USDA’s eligibility site to check eligible property addresses in your area.

Use a Down Payment Assistance Program

Some state and local governments, along with other entities like nonprofits, may offer down payment assistance programs. They’re more common in areas with a high cost of living, so not all of these programs will be available if you live in one of the best affordable places in the U.S.

Consider Alternative Strategies to Pay for a House With No Money

Though less conventional, it is possible to find alternative home financing options, such as seller financing or a lease-purchase agreement. You will need to enlist the help of a lawyer to pull together an agreement that protects you in these scenarios.

Seller financing involves creating a legal agreement directly with the seller, who serves as your lender. The seller typically needs to either fully own the house or just have a small mortgage balance left in order for this to get approved. Together you will negotiate the terms of the loan, including the length of the term and interest rate.

A lease-purchase agreement, also called rent-to-own or lease-to-own, will mean that you start off renting the property and will have the option to buy it after a certain period of time. You may need to pay a fee, and often a sales price is agreed on while you’re renting. A portion of your rent payment usually goes toward the purchase price, serving as a down payment.

Negotiating for closing credits might require you to make a down payment, but an agreement with the seller to cover some of your closing costs will reduce your overall spending. This can be challenging when the majority of the U.S. real estate market currently favors sellers, but the strategy may work with fixer-upper properties or if the inspection comes back with significant issues.

First-Time Homebuyer Loans With a Low Down Payment

Not all homebuyers will qualify for a home loan with no down payment. Here are some alternative options that require smaller down payment amounts.

Conventional mortgages Some mortgage lenders allow qualified first-time homebuyers of any income level to obtain a conventional home loan with just 3.5% down. Conventional loans typically require a credit score of at least 620.

Fannie Mae HomeReady and Freddie Mac Home Possible: Low-income first-time homebuyers may qualify for one of these home loans. The minimum down payment is just 3% and lenders may use your rent history to help supplement a lower credit score. Plus, with Fannie Mae, you could qualify for a $2,500 credit to reduce your loan balance.

FHA loans: These aren’t designed for first-time homebuyers, and you don’t need to worry about meeting income limits. With an FHA loan, you can qualify for a low 3.5% down payment if your credit score is 580 or higher.

How to Find the Best No-Down-Payment Mortgage Lenders

Compare multiple lenders early on in the home-buying process. Even if you qualify for a no-down-payment loan, lenders will vary in their interest rates and closing costs, all of which impact how much you pay upfront and over time.

If you’re trying to keep your cash spending as low as possible, look for lenders that offer closing cost credits for eligible borrowers. Usually they come with income limits and first-time homebuyer requirements. But if you qualify, that could mean extra cash in your pocket at closing — just be sure to check for hidden costs in the form of other fees or higher rates.

Pros and Cons of First-Time Homebuyer Loans With Zero Down

Is a zero-down home loan worth it? Weigh the pros and cons before you get started.

Of course, if you don’t like some of the terms associated with your home loan, you can always apply for a mortgage refinance later on.

The Takeaway

Buying a house is expensive, and using a no-down-payment mortgage can help you become a homeowner faster. But you’ll need to meet a number of eligibility requirements, including credit score minimums, income thresholds, and more. And while there are alternative options available, it’s always crucial to compare lenders, rates, and fees to make sure you’re not taking on hidden costs. Ready to explore some options?

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

What credit score do you need to buy a house with no down payment?

It depends on the program and the lender. VA loans technically don’t have a minimum credit score requirement. Many lenders want to see a 620 or higher, though some may accept a score of 600. For USDA loans, the minimum score required by lenders is usually 640.

What credit score is needed to buy a $300K house?

The credit score needed to buy a $300,000 house depends on the type of mortgage. While VA and USDA loans have a minimum of 600 and 640, respectively, FHA loans allow for scores as low as 500 (with a 10% down payment) or 580 (with a 3.5% down payment).

What credit score do I need to buy a $250,000 house?

The credit score needed to buy a $250,000 house depends on the type of mortgage. The lowest credit score you could have and still secure a mortgage would be 500 (for an FHA loan with a 10% down payment). Expect to need a minimum credit score between 580 and 640 for other loans, depending on which kind you choose.

Can I get an FHA loan with no down payment?

You cannot get an FHA loan with no down payment. The least amount you could put down in this situation is 3.5%. You are allowed to obtain this money via a gift from a friend or relative, but you’ll need to follow specific guidelines if you go this route.

How can I get a 700 credit score in 30 days?

Whether you can get to a 700 credit score in a month depends on what is impacting your score — and how high (or low) a score you currently have. Some quick fixes include paying down high credit card balances, identifying and repairing errors in your credit report, and becoming an authorized user on someone else’s credit card — as long as it has a low balance and isn’t delinquent. But even if you already have a fairly good score, it might be hard to achieve a 700 in this brief window of time.

What builds credit the quickest?

In order to quickly build credit, you need to pay all of your bills on time. Late payment entries can quickly derail your score and stay on your credit report for seven years. You can also lower your credit utilization ratio by paying down credit card balances and asking for higher limits (just don’t charge them up).

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Photo credit: iStock/Worawee Meepian

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
This article is not intended to be legal advice. Please consult an attorney for advice.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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Thinking about buying a $300,000 home? Your credit score will play a big role in whether you’ll get approved for a loan and what your interest rate will be. For most conventional loans, you’ll need a credit score of at least 620. But if your credit score is lower, you may still have some options available to you, including a government-backed loan.

What Credit Score Is Recommended to Buy a $300,000 House?

Housing is an important component of the cost of living. However, the price of a home does not directly dictate the credit score that you will need to secure a home loan. That said, it may have an effect on the credit score that lenders prefer to see. The more expensive a house, the more risk the lender is taking on, and the higher the credit score they may prefer.

Your credit score is a three-digit representation of your credit history, including how responsible you have been when paying off debt in the past, and how much debt you’re currently carrying. For most conventional loans, you’ll need a credit score of 620 or more. A conventional loan is the most common type of mortgage loan. It’s not insured by the federal government. Rather it’s backed by private insurers, as are jumbo loans.

Government-backed loans, including Federal Housing Administration (FHA) loans, have lower credit score requirements. FHA loans typically have a minimum credit score requirement of 580 for a loan with a 3.5% down payment. Lower scores aren’t necessarily excluded from the FHA program, but borrowers with a score below 580 will need to make a 10% down payment.

Recommended: Mortgage Refinance

How Much Down Payment for a $300,000 House?

The amount you’ll need to put down for a $300,000 home will depend on your loan. A conventional mortgage typically requires a 3% down payment if you’re buying your first home, and 5% for those who’ve purchased a home in the past. That’s $9,000 or $15,000 respectively.

However, if you want to avoid paying private mortgage insurance (PMI), you’ll need to make a down payment of at least 20%. That’s $60,000 for a $300,000 home.

As mentioned above, FHA loans require a 3.5% down payment ($10,500 on a $300,000 loan) if your credit score is 580 or above. Below this threshold you’ll need to put down 10%, or $30,000 on a $300,000 home. In general, anyone can apply for an FHA loan if they meet these requirements.

VA loans — which are available to eligible veterans, active-duty service members, surviving spouses, and certain members of the National Guard and Reserves — generally have no down payment requirement.

The higher your down payment, the less risk your lender is taking on, and the easier it may be to secure a loan. Lower risk also means that your lender may be willing to offer you lower interest rates and more favorable loan terms, which can decrease the overall cost of borrowing over time.

What Is the Monthly Payment for a $300,000 House?

Mortgage payments are often a big part of an individual’s average monthly expenses. That said, the monthly payment on a $300,000 house can vary widely depending on your interest rate, loan term, and the down payment you’ve made. One way to find out what your payments might look like and what size loan you could be approved for is to seek a mortgage preapproval from a lender.

Here is one example so you can see how costs stack up. Say you wish to purchase a $300,000 home with a 10% ($30,000) down payment. The loan amount is $270,000. Let’s assume you take out a 30-year conventional mortgage at a 6.50% interest rate. You’ll be required to pay PMI, since your down payment is less than 20%. Here’s a breakdown of what you’ll owe monthly.

  Principal and interest: $1,707

  PMI (ranges from 0.5% to 1.5%): $100

  Property taxes (vary by location): $300

  Homeowners insurance (varies by location and coverage): $250

  Total: $2,357 /per month

Recommended: Cost of Living in the U.S.

How to Afford the Down Payment for a $300,000 House

If you’re a first-time homebuyer, down payment assistance programs (DPAs) offered by state and local government and lenders can help you afford the upfront costs of buying a home. They may come in the form of grants that don’t need to be repaid or various types of loans, such as deferred loans or low-interest loans.

If you don’t qualify as a first-time homebuyer or for DPA, you’ll have to work to save up for a down payment in the months and years leading up to a home purchase. Consider saving this money in a dedicated account, so you aren’t tempted to use it for other purposes.

The Takeaway

There’s no one-size-fits-all credit score requirement to buy a $300,000 house. But a score of 620 or higher will open the door to conventional mortgage options, while those with a lower score might consider applying for an FHA loan. A stronger credit score can help you secure a loan with a lower interest rate and better terms. Ultimately, a higher score can help you save thousands of dollars over the long term by qualifying for a mortgage that better suits your needs.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How much income do you need for a $300,000 mortgage?

It takes a minimum annual income of $90,000 to afford a $300,000 mortgage. This assumes you don’t have to pay for private mortgage insurance and that you don’t have any other significant debts. This is based on the widely used 28%/36% guideline which suggests you spend no more than 28% of your gross income — the amount of money you earn before any deductions, such as taxes — on housing expenses, which includes mortgage payment, property taxes, and insurance.

What is a good down payment for a $300,000 house?

For a conventional mortgage, first-time homebuyers will need to put down at least 3%. Repeat buyers will need to put down 5%. However, you’ll have to pay for private mortgage insurance if you don’t put down at least 20%. The larger your down payment, the easier it may be to qualify for a mortgage or mortgage preapproval and the more likely your lender is to offer lower interest rate and favorable loan terms.

What credit score do I need to buy a $400,000 house?

To buy a $400,000 home, you’ll need a score of at least 620 for conventional and VA loans. And you’ll need a score of 580 for FHA loans with a down payment of 3.5%. If your score is between 500 and 579, you’ll need a 10% deposit to get an FHA loan.

Can I afford a $250,000 house on a $50,000 salary?

If you apply the 28%/36% rule, you would have 28% of your salary to spend on your home expenses (mortgage, taxes, insurance). This means your monthly housing budget is $1,166. The size of your mortgage payments will depend on your down payment, interest rate, and loan term, but it would be difficult to afford a $250,000 house with a budget of $1,166 per month.

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Photo credit: iStock/Sean Anthony Eddy

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

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Loans backed by the U.S. Department of Veterans Affairs (VA) have several benefits for U.S. veterans, service members, and surviving spouses, including competitive interest rates and no down payment requirement. And as of 2020, there are no VA loan limits if you’re borrowing for the first time. If you’ve already purchased a home with a VA loan, you may be subject to the same loan limits as conventional mortgages, which range from $806,500 to $1,209,750 for single-family homes, depending on your county.

If you’ve been wondering what the VA loan limit is, here’s a closer look at how VA loan limits work and when they come into play.

What Are VA Home Loan Limits?

VA home loan limits refer to the maximum VA loan the Department of Veterans Affairs will guarantee. The guarantee from the VA means that it will pay a certain amount to your VA loan lender if you default on your loan.

If you have full entitlement, meaning you don’t have any other active VA loans, the VA will guarantee 25% of your home loan if it’s over $144,000. If your loan is less than $144,000, the VA will guarantee $36,000.

If you don’t have full entitlement, the VA will lower its guarantee amount by subtracting the amount of entitlement you’ve already used. In this case, you may have to make a down payment on the home that you buy with your VA loan.

What Are VA Loan Limits if You Have Full Entitlement?

So, what is the maximum VA loan limit if you have full entitlement? Since 2020, there has been no limit. You can take out as big a loan as you can qualify for with no down payment requirements. Your borrowing power will only be limited by the lender’s underwriting criteria, which includes thresholds for credit, income, and debt-to-income ratio.

The elimination of VA loan limits for borrowers with full entitlement gives many people more homebuying power without having to worry about a down payment or turn to a jumbo loan, which can have a stricter approval process.

You likely have full entitlement if you’re a first-time homebuyer. Alternatively, you may qualify if you borrowed a VA loan in the past but already paid it off in full after selling your property or having a foreclosure or short sale on your property.

Recommended: Average Monthly Expenses for One Person

When Do VA Loan Limits Apply?

VA loan limits apply if you don’t have full entitlement. Here are some circumstances where you wouldn’t have full entitlement to this type of mortgage loan:

•   You already have a VA loan and are still paying it back.

•   You paid off a VA loan in full but still own the home you used it for.

•   You refinanced your VA loan into a non-VA loan and still own the home.

•   You had a short sale, deed in lieu of foreclosure, or foreclosure on a previous VA loan and didn’t pay the loan back in full.

If any of these scenarios apply, your VA loan limits would match the conforming home loan limits for your county. However, you may be able to borrow more than your county loan limit with a VA loan if you’re able to make a down payment.

VA Loan Limits by County

If you don’t have full entitlement, your VA loan limits often fall at $806,500. However, they can go up to $1,209,750 in areas with a high These limits are the same as the Federal Housing Finance Agency’s conforming loan limits and can be found on the U.S. Federal Housing website. The limits are adjusted each year and are higher for two-, three-, and four-unit homes.

If you need a bigger mortgage, you might consider a jumbo loan. High-income earners that make $250,000 to $500,000 per year tend to be the most suitable candidates for jumbo loans.

VA Loan Limits Example

If you don’t have full entitlement, VA loan limits will apply. To give an example, let’s say you’re looking to purchase a home in one of the more affordable places in the U.S. that has a loan limit of $806,500.

With full entitlement, the VA would guarantee up to 25% of that amount, or $201,625. If you’re already using $30,000 of your entitlement, the VA would subtract that amount and offer a guarantee of $171,625. Depending on the lender, you may be permitted to borrow a loan up to four times that amount, or $686,500. Borrowing a larger loan may be a possibility, but you’d have to make a down payment and pay closing costs.

If you are curious about how a VA loan stacks up against a conventional mortgage, you can go through the mortgage preapproval process to see what conventional loan amount and terms you might qualify for. You can also explore down payment assistance programs that could help you with a down payment if you don’t apply for the VA loan.

What VA Loan Limits Mean for You

If you’re buying your first home or have already paid off a previous VA loan in full, VA loan limits probably won’t affect you at all. Borrowers with full entitlement can take out a VA loan of any size without a down payment, as long as they can meet a lender’s financial criteria. You could potentially buy a high-cost home with a loan that exceeds traditional mortgage limits, as long as the monthly payments fall within your budget.

If you have an active VA loan or another reason why you don’t have full entitlement, VA loan limits will restrict how much you can borrow without making a down payment. Your limits will fall between $806,500 and $1,209,750, depending on your county. These limits are adjusted annually and may increase from year to year.

Understanding your VA loan limits is important because it impacts your homebuying power, as well as your down payment options. A major benefit of VA loans is their 0% down payment requirement, so make sure you’re clear on where your entitlement stands and any VA loan limits that apply based on your history of borrowing and the county where you want to purchase a home. Remember, too, that entitlement is not the same as eligibility. Your first step toward a VA loan is to obtain a Certificate of Eligibility from the VA.

The Takeaway

VA loan limits may be a non-issue if you’re borrowing for the first time. Instead of worrying about loan restrictions, you can turn your focus to determining your home-buying budget, finding a home, and choosing a lender. If you don’t have full entitlement, a VA lender can help you determine how much you can borrow and whether you might need to make a down payment.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Is there a maximum loan amount for VA loans?

There’s no maximum loan amount for VA loans for homebuyers with full entitlement who don’t have an active VA loan at the time of borrowing. However, lenders may limit how much you can borrow based on your credit, income, debt-to-income ratio, and other aspects of your finances.

Can I buy a million dollar home with a VA loan?

You can buy a million dollar home with a VA loan if you have full entitlement and strong enough finances to meet a lender’s approval. Borrowers without full entitlement will be subject to loan limits, which vary by county and range from $806,500 to $1,209,750.

How much do I need to make to buy a $400K house with a VA loan?

You would need a minimum income of roughly $115,000 and minimal other debts to be able to afford a $400,000 house with a VA loan. This assumes you have full entitlement and do not make any down payment. This estimate aligns with the 28/36 rule, which recommends spending no more than 28% of your gross monthly income on your mortgage payments and no more than 36% on your mortgage plus other debt payments. Don’t forget to take the cost of living into account as you crunch the numbers.

What is the jumbo limit for a VA loan?

There’s no jumbo limit for a VA loan if you have full entitlement — you can borrow as much as you need, subject to lender approval. In fact, the VA removed loan limits for borrowers with full entitlement in part to help them avoid jumbo loans, which can have high down payment requirements and strict standards for loan approval.

Can I have two VA loans at the same time?

You can have two VA loans at the same time, but you won’t have full entitlement. That means the VA will guarantee a lower amount of your loan (or nothing at all). In some cases, you may be required to make a down payment on your second VA loan.

How much income do I need for a $300K mortgage?

The income you’ll need for a $300k mortgage depends on several factors, including your average monthly expenses, down payment amount, interest rate, and repayment term. A general rule is to keep your mortgage payment below 28% of your gross monthly income (and your mortgage plus other debts below 36%).

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Photo credit: iStock/Prostock-Studio

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

^†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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Mortgage preapproval could take a couple days or up to a couple weeks depending on the lender and the effort required to verify the necessary financial information. Though mortgage preapproval isn’t a requirement, getting preapproved can help determine your home-buying budget and having a preapproval letter in hand demonstrates to sellers that you’re a serious buyer.

Here’s a closer look at how mortgage preapproval works, including how long preapproval lasts and steps to potentially speed up the process.

What Is a Mortgage Preapproval?

A mortgage preapproval is a letter or statement from a mortgage lender that indicates that you are conditionally approved to borrow up to a certain amount for a home purchase. It generally includes the type of mortgage loan you would likely qualify for and the interest rate you’d get if you ultimately apply for a mortgage.

Whether you’re buying your first home or in a competitive market, having mortgage preapproval gives some assurance to sellers that your financial ducks are in a row to buy a home. Maybe you aren’t buying in one of the best affordable places in the U.S. — in that case, it can be especially helpful to have preapproval as a guide to what you can actually afford. For many buyers, it can be advantageous to get preapproved before you start looking at properties so you’re prepared to make an offer.

You need to submit an application to get mortgage preapproval. This usually entails a hard credit check and submitting documentation related to income, assets, and debts.

How Long Does It Take to Get Preapproved?

The sooner you get preapproved, the sooner you can get serious about house-hunting. So how long does it take for mortgage preapproval?

After you submit your application, the mortgage preapproval process can take around 10 days to complete. Lenders will review the financial documentation submitted with your application, run a hard credit check, and potentially verify your employment.

Gathering the necessary financial information and completing the application itself can take some initial legwork. Before applying, you might also spend time browsing lenders to compare options and find mortgage terms that best fit your needs, so it’s worth factoring these steps into your timeline.

Recommended: Down Payment Assistance Programs

How Long Does a Mortgage Preapproval Last?

When a lender issues a mortgage preapproval letter, it’ll include the period of time the preapproval is good for. Typically, mortgage preapproval lasts for 60 to 90 days, though it’s possible that lenders could impose a shorter time limit.

Mortgage preapprovals expire because interest rates and a borrower’s financial situation are subject to change over time. Employment status or savings levels can change with the ups and downs of the job market and cost of living in the U.S. Getting your preapproval renewed may require less work than the initial application, but it may involve another credit check and resubmitting financial documents. Keep in mind that significant financial changes could impact how much you qualify for.

Is Preapproval the Same as Prequalification?

You may hear the terms preapproval and prequalification used interchangeably. While both can give you an idea of how much house you can afford, there are key differences between the two. Here’s a quick look at mortgage prequalification vs. preapproval:

Mortgage prequalification involves a high-level review of your finances to get an estimate of how much you might be able to borrow, and at what interest rate. Unlike mortgage preapproval, prequalification doesn’t include a hard credit check and you won’t be required to submit financial documents like tax returns.Typically, you’ll need to just provide the lender with details on your income, employment, monthly debts, and anticipated down payment.

Getting prequalified is a quicker process than preapproval, since your information doesn’t require the same level of verification by the lender. Thus, prequalification is less of a guarantee that you’ll qualify for financing, but it can be used to inform your home-buying budget.

How Long Does Mortgage Approval Take After Preapproval?

Suppose you’re preapproved and have your offer on a house accepted. How long will it take to get approved for a mortgage to get to the closing table? Mortgage approval can take anywhere from 30 to 60 days, though lenders often aim to time the approval with your closing date in the contract.

Even if you’re preapproved, you’ll need to complete a home loan application with your chosen lender. You’ll finalize your choice of the type of home loan and your mortgage term.

Once your materials are submitted, the lender has several steps to complete. They’ll order a title search and an appraisal to determine whether the offer price matches the property value. This is also when the underwriting process occurs, which involves verifying your financial information and qualifications as a borrower. Though it’s optional, a home inspection would be completed at this stage, too.

Recommended: Average Monthly Expenses for One Person

Factors Affecting Mortgage Preapproval

Lenders consider a variety of financial information before issuing mortgage preapproval. Here are several of the key factors for getting preapproved.

•   Credit score: Lenders use your credit score to assess your risk as a borrower. Credit score requirements vary by lender and mortgage type. If you qualify as a first-time homebuyer, for instance, you could be approved for an FHA loan with a credit score of 500.

•   Debt-to-income (DTI) ratio: How much home you can afford is determined in part by your DTI ratio, which is calculated by dividing your monthly debt payments by your gross monthly income. A DTI ratio of 36% or lower is considered good, though it may be possible to get preapproved with a higher DTI ratio.

•   Down payment: Having enough money to cover a down payment and closing costs is another important factor. Certain government-backed loans have no down payment, while jumbo loans require 10% down. Closing costs can range from 2% to 5% of your mortgage principal.

•   Employment: Your income and employment history are considered when a lender assesses your ability to repay the loan.

How to Speed Up the Preapproval Process

The mortgage preapproval process can vary by lender. When comparing mortgage options from different lenders, you can also look into the expected timeline for preapproval.

Having all the necessary documents prepared could help speed up the process. The lender will likely require that you submit the following materials and information:

•   Proof of identity: A valid driver’s license, passport, or other government-issued ID.

•   Proof of income and employment: Pay stubs, tax returns, and bank statements if self-employed.

•   Proof of assets: Bank statements, investment account statements, and gift letters from family, if applicable.

•   Debt and expenses: Documentation of student loans, auto loans, and any other recurring debt or monthly expenses.

The Takeaway

How long does preapproval for a mortgage take? It can require anywhere from a couple days to a couple weeks, so it’s smart to plan for around 10 business days. However, having all the necessary personal and financial information ready can help speed up the preapproval process. Once preapproved, you’ll have a good idea of how much house you can afford, which can inform your house hunt.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

How quickly can you get preapproved for a mortgage?

Some borrowers get preapproved for a mortgage in as little as a couple days, though the process doesn’t always move this quickly. It may take some time for lenders to verify your financial information and issue a preapproval letter.

How long does preapproval usually take?

The typical timeline for mortgage preapproval is around 10 days. However, delays can occur due to missing documents or delays in verification by an employer.

Do mortgage preapprovals hurt your credit score?

Mortgage preapproval involves a hard credit check which stays on your credit report for up to two years. This could put a temporary ding in your credit score — usually less than five points — for up to a year.

Is a preapproval a final approval?

Mortgage preapproval is not a guarantee for final approval on a mortgage. Borrowers still need to submit a mortgage application after having an offer accepted on a property.

Can you be denied after preapproval?

Yes, you can be denied after being preapproved for a mortgage due to changes in employment or personal finances. Borrowers can also be denied because of issues with the property itself or an appraisal that comes in below the purchase price.

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Photo credit: iStock/Photography and Illustrator

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

^¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

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As its name implies, a mortgage preapproval is a lender’s way of telling you that it has prospectively approved you for a home loan up to a certain estimated amount. Having preapproval can be a big boon in a competitive housing market. It signals to sellers and real estate professionals that you’re serious about buying a home — and that a lender is, at least provisionally, willing to back you up.

But in the world of home shopping, there’s a lot of lingo to learn — for starters, there’s a difference between preapproval and prequalification. Below, find all the details you need to stay in the know and be ready to go when you find your dream house.

What Is a Mortgage Preapproval Letter?

While the mortgage preapproval itself is the process by which a prospective lender estimates how much of a home loan you might be approved for — which we’ll get into in more detail below — the mortgage preapproval letter is the result of that process, and potentially an important aid in acquiring the keys to your new home.

A mortgage preapproval letter is the document that the lender offers you showing that you’ve been preapproved for a home loan up to a certain amount. Getting this letter can help you understand which homes are within your budget while you’re shopping — and also serve as a proof point for sellers that you’re not “just looking.”

Your preapproval letter will vary depending on the lender you choose, but will include the lender’s name and the amount up to which you’ve been preapproved. It’s also important to bear in mind that a preapproval is only valid for a certain period — usually up to 60 or 90 days after the mortgage preapproval process. That window gives you time to shop around, but not so much time that you can dawdle.

Recommended: First-Time Homebuyer Guide

Why Would You Want a Mortgage Preapproval?

Seeking out preapproval for a mortgage is not as simple as entering your name, email address and Social Security number into an online application. (If you’re prompted to enter a few numbers and promised a response in just seconds or minutes, that’s a prequalification, not a preapproval — and it doesn’t carry the weight a preapproval does.)

Although a preapproval does not guarantee a loan, it is a stronger statement than a prequalification. That’s because, to be preapproved, prospective borrowers must have some of their basic financial details, like income and credit score, verified. A preapproval involves a hard credit check rather than a soft one, which means it’s a better vote of confidence from the lender.

Let’s take a look at which specific factors play into your being preapproved (or not).

Mortgage Preapproval Factors

The factors your home loan lender will consider to preapprove you for a mortgage are similar to the ones they’ll look at to actually approve you for the loan. The difference is how in-depth the verification process goes.

Factors include:

•   Credit score and history (as verified by a hard credit pull)

•   Income and employment stability (as verified by recent W-2s, paystubs, and tax returns)

Lenders may also consider factors such as your debt-to-income (DTI) ratio, which displays the money you owe in loan payments each month as a percentage of your monthly income, helping lenders understand your ability to make payments on whatever type of mortgage loan you may choose.

Is a Mortgage Preapproval the Same as Prequalification?

No. A mortgage preapproval holds more weight than a prequalification, precisely because it requires a hard credit pull and some level of verification (whereas a prequalification may be based on a soft credit check and is therefore a weaker estimate of your actual ability to afford to buy your first home or afford your jumbo mortgage, or anything in between.

Mortgage Prequalification vs. Preapproval

Getting prequalified can still be a helpful stop on the homebuying journey — especially if you’re still early on the path. It can be especially useful for those who qualify as a first-time homebuyer and haven’t taken out a home loan before or recently.

A prequalification letter can help you understand a very general estimate of how much of a mortgage loan you might qualify for, which can help you determine what types of homes might be within your budget. It’s a good way of seeing how your mortgage payments would fit in with your overall cost of living. However, once you’re getting serious about shopping, a preapproval letter will make it easier to move forward with speed and flexibility.

What Do You Need to Get a Mortgage Preapproval?

Every lender’s process for getting preapproved for a mortgage is a little different, but usually you will need to provide your basic demographic information (such as your name, current address, and Social Security number) as well as providing documentation to the lender to verify your income and other stats, as described above.

How to Get Preapproved for a Mortgage

The good news is, these days, plenty of lenders make it not just possible, but easy to complete all the steps for your preapproval online. You may be able to upload the necessary documentation into their web portal — or, if you’d rather work with hard copies, fax, mail, or bring them into a brick-and-mortar branch (unless you’re working with an online-only lender).

How Long Does It Take to Get Preapproved?

While a mortgage prequalification can take just a few seconds or minutes, a mortgage preapproval can take a bit longer — after all, the lender has to actually verify the information you’ve offered. Again, each lender works a little differently, but in most cases, if preapproved, you should get your mortgage preapproval letter within 10 business days of applying.

What Happens After Mortgage Preapproval?

Once your mortgage preapproval goes through, you’ll have your mortgage preapproval letter in hand and be able to shop with confidence. Your preapproval letter can also be used to help you stick out from the crowd in a competitive market: You’ll already have a leg up on shoppers who haven’t gone through the preapproval process, who will be starting from scratch (whereas your mortgage application will already be partially ready to go).

Does the Preapproval Expire?

The point of a mortgage preapproval letter is to offer sellers and real estate agents information about your financial standing — and your financial standing can actually change pretty quickly.

That’s why mortgage preapproval letters usually expire within 60 or 90 days. This gives you a window for house shopping, but not indefinite time — so it’s a good idea to save your preapproval application for the moment when you’re really ready to go through with a purchase if you find the right home.

How Far in Advance Should You Get Preapproved for a Mortgage?

Since a preapproval does have an expiration date, it’s best not to start the preapproval process for a mortgage too far in advance. At the same time, if you’re already seriously home-shopping, not having a preapproval letter could hinder you if you find a home you want to move forward with.

Thus, the best time to get preapproved is when you feel that, if you found the right house tomorrow, you’d be ready to go ahead and make an offer. You should also be ready to spend the next 60 to 90 days, depending on your preapproval window, shopping with some level of seriousness. Another tip: If you think you might need help making a down payment, you should look into down payment assistance programs well before you seek preapproval.

Does Getting Preapproved Commit You to Anything?

A preapproval does not constitute a commitment — on either side of the table. So while you’re not committed to going forward with the mortgage, neither is your lender formally committed to loaning you the money.

Does a Preapproval Hurt Your Credit Score?

A mortgage preapproval does usually involve a hard credit pull, which can temporarily ding your score by a few points. However, in most cases, this type of credit score impact falls off relatively quickly and shouldn’t drop your score too much.

Recommended: Best Affordable Places to Live in the U.S.

Does Preapproval Mean You Get the Mortgage?

While a mortgage preapproval is definitely a vote of confidence from your lender, it doesn’t automatically mean you’ll get the mortgage. When you’re ready to formally apply, you’ll go through a more in-depth underwriting process that may require further verification of the factors used to determine your eligibility — so while a preapproval letter is a great estimate, it’s not a guarantee.

The Takeaway

A mortgage preapproval letter can help you show sellers that you’re motivated and ready to go — as well as giving you some pretty solid insight into how much house you can truly afford.

Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.

SoFi Mortgages: simple, smart, and so affordable.

FAQ

Does preapproval mean you are approved for a house?

A mortgage preapproval letter is just that — a preapproval. It is not the same as having an approved loan offer. It will, however, list an estimated figure that shows how much a lender may be willing to qualify you for, which is helpful as you shop for a home.

Does preapproval guarantee a loan?

A mortgage preapproval letter is a giant step toward getting approved for a loan, but it is not a guarantee. If your financial standing changes between the time you get preapproved and the time you put in your formal application, you may not be qualified for the same loan amount — or, in extreme cases, you may not qualify at all.

Can you be denied a loan after preapproval?

Yes, it’s possible to be denied a home loan, even after going through the preapproval process with that same lender. That’s because your personal financial situation or market conditions might change substantially between the time you got preapproved and the time you’re applying for the loan itself — though generally, if nothing catastrophic happens (like a job loss or serious credit score dip), this is an unlikely situation.

How much house can I afford if I make $70,000 a year?

Affording a house is about more than just how much money you make each year. It also matters how much debt you currently carry, what interest rates you qualify for, and how much you can set aside for a down payment. That said, one rule of thumb is that the cost of your home should not exceed three times your income. On a salary of $70,000, that would be $210,000. This is only one way to estimate your budget, however, and it assumes that you don’t have a lot of other debts.

Can I afford a $300K house on a $60K salary?

Your ability to afford a certain house depends on more than your salary alone. However, as a general rule, if you earn $60K a year, you may be able to afford to spend around $180,000 on a house, maybe a bit more if you have little or no other debts or can make a large down payment. However, depending on where you want to live, current interest rates, and how much debt you’re carrying, that figure could change significantly.

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Photo credit: iStock/Jacob Wackerhausen

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility-criteria for more information.

*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Third Party Trademarks: Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®

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