Aspiring Homeowner

Aspiring Homeowner

What’s Your Credit Score

How much can I borrow?

How large of a downpayment can you make?

  • A conventional mortgage without private mortgage insurance (PMI) will typically require a 20% downpayment
  • A conventional mortgage with PMI will typically require a 3% downpayment.  PMI will increase your monthly payment and can normally be cancelled once you have achieved 20% equity in the home.
  • PMI is designed to protect the lender in case you stop making payments on your loan. The cost of PMI varies, but you can expect to pay about $30 to $70 per month for each $100,000 you borrow, according to Freddie Mac. That means if you borrow $300,000 for a home with less than 20% down, you’re looking at $90 to $210 per month in PMI. The good news is that PMI can be removed once you build 20% home equity.

Debt to Income Ratio

Expressed as a percentage, your debt-to-income ratio is the portion of your gross (pre-tax) monthly income spent on repaying regularly occurring debts, including mortgage payments, rents, outstanding credit card balances, and other loans.

Home Mortgage Types

  • Conventional loans are mortgages that aren’t part of government programs. These loans tend to be good for people with solid credit and a down payment of at least 3% to 5%. Downpayments of less than 20% will typically require Private Mortgage Insurance and/or meet the requirements of Fannie Mae /Freddie Mac.
  • Fannie Mae and Freddie Mac: The minimum down payment for a conventional loan is 3% with the following Fannie Mae and Freddie Mac mortgage types:
    • Standard 97% Loan-to-Value Mortgage Standard 97% LTV loans are a Conventional 97 loan that allow you buy a home with a loan-to-value of 97%, which means 97% of the home purchase would be covered by a mortgage while the remaining 3% would be paid by your down payment. There are no income limits for Standard 97% LTV mortgages, but at least one borrower has to be a first-time homebuyer. Homebuyers must have credit scores of at least 620 for a Conventional 97 loan.
    • Fannie Mae HomeReady® Mortgage: Fannie Mae’s HomeReady program is open to all borrowers who meet income and credit requirements — not just first-time homebuyers — and the minimum down payment is 3%. You may qualify with credit scores as low as 620.
    • Freddie Mac HomePossible® Freddie Mac’s HomePossible program accepts down payments of as low as 3% for low- to moderate-income homebuyers. For a home purchase, you can qualify with credit scores as low as 660.
    • Freddie Mac HomeOne®: Freddie Mac’s HomeOne program lets first-time homebuyers put down a minimum of 3%, and there’s no income limit. You may qualify with minimum credit scores of 620.
  • VA loans in Wisconsin: If you’re an eligible veteran or service member comparing mortgage rates in Wisconsin, a VA loan can be attractive since down payments and mortgage insurance aren’t typically required, and you may be able to qualify even if you don’t have great credit.  Similar to FHA loans, VA loans are insured by the government but issued by private lenders.  Visit and to learn more about the various VA home loan programs.
  • First-time homebuyer programs in Wisconsin: If you’re hoping to buy your first home, there may be some assistance programs available to you in Wisconsin.
    • WHEDA Advantage Conventional The Wisconsin Housing and Economic Development Authority offers an Advantage Conventional program. If you have a minimum credit score of at least 620 and meet certain income criteria, you may qualify for a 30-year conventional mortgage with a fixed-interest rate and down payment assistance. You don’t have to be a first-time homebuyer to qualify — though first-time homebuyers must complete a homebuyer education course.
    • WHEDA Advantage FHA: Advantage FHA is similar to the Advantage Conventional program. Qualified applicants can get a 30-year FHA mortgage with a fixed interest rate and down payment assistance. To be eligible, your income must fall under a certain limit. First- time homebuyers also need to participate in homebuyer education, and all applicants must have a minimum credit score of 640.
    • WHEDA Easy Close DPA: With WHEDA Easy Close DPA, you can take out a second mortgage of up to 6% of the purchase price of the home with a minimum of $1,000 when partnered with a WHEDA Conventional first mortgage loan. The loan comes with a 10-year fixed rate that you’ll need to repay via monthly payments. You can use it to help pay for the upfront costs of buying a house.
    • WHEDA Capital Access Advantage DPA: WHEDA Capital Access Advantage DPA provides a 30-year loan with 0% interest (actual APR may vary) and no monthly payments. It can help you cover your down payment. You can borrow up to the greater of $3,050 or 3% (for conventional) or 3.5% (for FHA) of the purchase price of your home.
  • USDA Rural Development
  • Additional mortgage resources
    • Consumer Financial Protection Bureau   A wealth of resources to assist in understanding credit reports, home financing, and real estate mortgages. 

Realtor Tips

Realtor Connections:

  • Dos: 
  • Interview with several agents if necessary to make sure your expectations are understood, and you know what level of service they can provide. Communication is key in this intricate process.
  • A good agent, whether researched or referred to you, will help you understand how all the steps to home ownership (or sale of)  as needed for a successful transaction. They have access to the most accurate information on properties as well as access to other marketing sites to help determine the TRUE market value of a purchase or sale.
  • Coordinate your lender with your agent, they are both important pieces to the puzzle and will work together to assure success.      
    • Realtors do have access to many lenders and can help you find the right fit! 
  • Talk to your agent about the many steps involved - searching, offers, inspections, title, closing and more. Each transaction is different, and each can take a different path to get to closing. Remember, Real Estate agents are licensed and regulated to meet the high standards of the profession.