Shopping for a dream home is fun—so fun that many homebuyers begin searching before they even know what they can afford. Determining your eligibility for a mortgage loan should always be the starting point. By taking this important first step, you'll save time, know what you can realistically afford, and earn more credibility with sellers when you make an offer.

Here's how to calculate your mortgage loan eligibility.

Why Determine Eligibility For a Mortgage Loan?

There are three main reasons to pre-determine your loan eligibility:

It’ll Delight Your Realtor

Realtors invest significant time and resources to guide you through the buying process. Determining your eligibility upfront helps them find homes within your budget and shows you value their time.

It Keeps You Within Budget

Falling in love with a home only to discover it’s beyond your budget can be a heartbreaker. By pre-determining eligibility for a mortgage loan, you’ll establish clear financial boundaries. That ensures you focus your search on homes that fit your budget.

It Keeps You Competitive

Low inventory has made the market incredibly competitive, which means you have to move quickly to snag your dream home. Pre-determining eligibility for a mortgage loan ensures you’re ready to make credible offers that sellers and agents take seriously.

How to Determine Eligibility For a Mortgage Loan

Use a Mortgage Loan Eligibility Calculator

Our online mortgage loan eligibility calculator is quick and easy to use.

Just enter the home price, down payment amount, loan term, interest rate, and voilà—out pops your estimated monthly payment. This tool helps you establish a budget and serves as a starting point for lender discussions.

Find the Right Lender

Choosing the right home loan mortgage lender is a high-stakes decision that can mean the difference between smooth sailing or taking a ride on a real estate rollercoaster. Don’t rush without doing your research. Our best advice? Work with a non-commission-based lender who puts your best interests over profit.

Get Pre-qualified

Getting pre-qualified is straightforward once you find an experienced and trustworthy lender. After providing your basic financial information, the lender will assess your financial history and conduct a “soft pull” on your credit to determine your eligibility.

Within a few days (sometimes even hours), your lender will send a mortgage loan certificate of eligibility—this letter will come in handy when the time comes to throw down an offer.

Determine Mortgage Terms

Determining your mortgage terms is critical for long-term financial planning. Key factors include:

• Loan duration: While most homeowners choose 30-year repayment schedules, you can save money on interest by reducing that timeline to 15 or 20 years.
• Interest rate: Fixed-rate mortgages maintain stable monthly payments throughout the loan. Adjustable-rate mortgages (ARMs) typically start lower but can increase after the initial fixed period.

How to Calculate Your Mortgage Loan Eligibility?

The easiest way to calculate mortgage loan eligibility is by using a mortgage loan eligibility calculator. However, to calculate your exact borrowing capacity, lenders will evaluate your:

• Income
• Credit score
• Debt-to-income ratio
• Down payment amount
• Cash reserves
• Monthly expenses
• And additional financials

If you have concerns about your financial health or mortgage loan eligibility, keep in mind that we offer several specialty programs, including downpayment assistance. These programs are designed to help buyers who might have difficulty qualifying for conventional loans.

We Turn the Lending Journey Into a Walk in the Park

Whether you’re still shopping for a new home or have already found it and need the right lending partner, JustChoice Lending is here to help. As a local-first, non-commission-based lender, we’ll help you find the right loan with the right terms. Contact us today!