Buying your first home, explained. Free.
Six short modules on credit, debt-to-income, down payment help and every major loan program. Interactive tools let you run your own numbers. When you're ready, a real estate agent and a licensed loan officer can answer your questions at no charge.
The course
Start with Module 1 even if you don't feel ready. Most buyers are closer than they think, and each module shows exactly what to work on.
Pro tipReady is a checklist, not a feeling
Lenders look at four things: credit, income, debts and cash. This module helps you see where you stand on each and what owning a home really costs every month.
Check what's true for you today
Your payment is more than the loan
Lenders call it PITI: principal, interest, property taxes and homeowner's insurance. Add mortgage insurance if you put less than 20% down, and HOA dues if the home has them. Change the numbers below to see what a home would cost you.
Hypothetical example for education only. The rate is an assumption you can change, not a quote or an offer of credit. Actual rates, APR, payments and terms depend on the lender, the loan program and your credit, income and property, and not everyone qualifies. Mortgage insurance is estimated at 0.55% per year under 20% down. Module 5 compares this payment across FHA, conventional, VA and USDA.
Budget for these before you shop
Why owning usually wins over time
Every rent check pays down your landlord's mortgage. Every mortgage payment pays down yours. A fixed-rate mortgage locks your principal and interest for 30 years, while rent tends to rise. Over time you build equity two ways: paying down the loan, and any increase in the home's value.
Renting can still be the right call if you might move within two or three years, since buying and selling costs can eat the equity you'd build in that time. Owning works best when you plan to stay put.
Don't let a lender tell you what you can afford. Let them tell you the maximum, then you decide the payment you can live with and still sleep at night.
Pro tipModule 1 quiz
Your credit score is a story. Lenders read it in about 30 seconds.
Learn which scores mortgage lenders actually use, what moves them, how to fix errors without paying a "credit repair" company, and what to do if you have little or no credit.
Slide to your score and see your options
Every loan program has its own score floor. Move the slider to a score you think you have. Each lender adds its own rules, and your income, debts and savings matter as much as the score.
Typical picture as of October 2026. Fannie Mae's automated underwriting dropped its hard 620 minimum in November 2025, but most lenders and mortgage insurers still look for about 620. VA and USDA have no official floor; lenders set their own. Educational ranges only, not an offer or approval.
You don't have one credit score. You have dozens.
The score in your banking app is rarely the one a mortgage lender sees. Lenders pull a tri-merge report, your file from all three bureaus (Equifax, Experian and TransUnion). Each returns a score and the lender uses the middle one. With two borrowers, most programs use the lower of the two middle scores.
For decades that meant "Classic FICO," an older version built for mortgages. That changed in 2026.
- Conventional loans: Since September 3, 2026, every lender approved by Fannie Mae and Freddie Mac may use VantageScore 4.0 instead of Classic FICO. Lenders that aren't set up for it keep using Classic FICO.
- FHA loans: VantageScore 4.0 and FICO 10T become eligible for FHA case numbers assigned on or after January 1, 2027.
- FICO 10T is approved for the future but isn't in use yet for Fannie and Freddie loans.
- All borrowers on one loan must be scored with the same model.
| Classic FICO | VantageScore 4.0 | |
|---|---|---|
| Who built it | Fair Isaac (FICO) | The three credit bureaus, jointly |
| Score range | 300–850 | 300–850 |
| Thin credit files | Needs about 6 months of history and an account reported in the last 6 months | Can score people with less history, so millions more people get a score |
| Rent payments | Not counted | Counted when your landlord or a rent service reports them |
| Trends over time | A snapshot of this month's balances | Looks at whether balances have been rising or falling |
| Where you'll see it | Still the mortgage default at many lenders | Common in free credit apps, now accepted on conventional loans |
Ask every lender you talk to which score they're using. If you pay rent on time and have a thin file, the answer can change your rate.
Pro tipFive things build a FICO score
Tap each factor to see what it means and what you can do about it this month. The bars show roughly how much each one counts.
Try it: your credit card utilization
Utilization is your card balances divided by your card limits. It's the fastest factor to change because it only reflects what the card company reports this month.
Example numbers are filled in. Type in your own cards; nothing you enter leaves this page.
Fix it yourself. It's free.
Anything a credit repair company can legally do, you can do yourself at no cost. Federal law (the Credit Repair Organizations Act) bars those companies from charging you before they've done the work, and no one can legally remove accurate, current negative information.
- Get all three reports. Go to AnnualCreditReport.com, the only official free site. You can check each bureau weekly at no charge.
- Mark every error. Accounts that aren't yours, late payments you didn't make, debts listed twice, wrong balances, and old negatives past their reporting period (most fall off after 7 years).
- Dispute with the bureau that shows the error. Online is fine. Attach proof: a statement, a payoff letter, a bank record. The bureau generally has 30 days to investigate.
- Bring card balances down before the statement date, not the due date. The statement balance is what gets reported.
- Leave old accounts open and don't apply for new credit (car, furniture, a store card) while you're buying a home.
- Ask your loan officer about a rapid rescore. Once you've paid something down or fixed an error, a lender can request an update in days instead of waiting a month. Only a lender can order one.
Myth or fact? Tap a card.
No score isn't the same as no chance
Plenty of responsible people pay cash for everything and have no score. Some loan programs let a lender build your credit picture from nontraditional tradelines: bills you already pay every month. Usually that means about 12 months of on-time history, documented with cancelled checks, bank statements or letters from the company.
Two other ways to build a score: become an authorized user on a family member's long-standing, low-balance card, or open a secured card and keep its balance under 10%. Give either one at least six months before you apply.
Module 2 quiz
The one number that decides how much house you can buy
Your debt-to-income ratio (DTI) compares your monthly debt payments to your monthly income before taxes. It caps your loan amount more often than your credit score does.
Front-end and back-end
Example: You earn $6,000 a month before taxes. The house payment would be $1,800, and you pay $450 on a car and $150 on cards. Front-end: $1,800 ÷ $6,000 = 30%. Back-end: $2,400 ÷ $6,000 = 40%.
DTI calculator
Typical guidelines. Automated underwriting can approve higher ratios for borrowers with strong credit, savings or a larger down payment, and lower ones for weaker files.
What lenders count, and what they don't
Counts as debt
- Car loans and leases
- Minimum payments on every credit card
- Student loans, even deferred ones (see below)
- Personal loans and installment plans
- Child support and alimony
- Payments on other property you own
- Debts you co-signed for someone else
Doesn't count
- Utilities, phone and internet
- Car and health insurance
- Groceries, gas, childcare
- Your current rent (it's being replaced)
- Subscriptions and gym memberships
- Most installment loans with 10 or fewer payments left (varies by program)
| Program | Monthly payment the lender uses |
|---|---|
| FHA | The payment on your report, or 0.5% of the balance if it shows $0 |
| Fannie Mae conventional | Your documented income-driven payment, even $0, or 1% of the balance |
| Freddie Mac conventional | Your payment if above $0, otherwise 0.5% of the balance |
| VA | No count if deferred 12+ months past closing; otherwise the payment or 5% of the balance ÷ 12 |
| USDA | Your fixed payment, or 0.5% of the balance if it's $0 or changes |
What income lenders can use
Five ways to lower your ratio
- Pay off small debts. A $1,500 card with a $50 minimum frees up $50 a month of buying power, which can add $7,000 or more to your loan amount.
- Pay a car loan down to 10 or fewer payments if your loan program lets the lender leave it out.
- Add a co-borrower. A spouse or family member's income can count, along with their debts.
- Get your student loans on an income-driven plan and get documentation of the payment.
- Don't take on new payments. A new car before closing can end a loan approval.
Before you pay anything off, call a loan officer. Buyers often drain their savings paying off the wrong debt, then come up short for closing.
Pro tipModule 3 quiz
You probably need less cash than you think
The 20% down rule is a myth for most buyers. This module covers real minimums, gifts, seller credits and the thousands of down payment assistance programs across the country.
Minimum down payment by loan type
Putting 20% down on a conventional loan removes mortgage insurance, but waiting years to save it often costs more than the insurance would have, especially when prices rise in the meantime.
Five kinds of help
Places to look
- Your state housing finance agency (HFA). Every state has one, and most run first-time buyer and down payment programs through approved lenders. Search "[your state] housing finance agency."
- Your city and county. Many use federal HOME and CDBG funds for local assistance, often with larger amounts in specific neighborhoods.
- Your employer. Hospitals, school districts, universities and large companies sometimes offer homebuying help.
- Profession-based programs. HUD's Good Neighbor Next Door offers 50% off list price on select HUD homes in revitalization areas for teachers, police, firefighters and EMTs.
- Nonprofits and credit unions. Local housing nonprofits and HUD-approved counseling agencies keep up-to-date lists.
- Ask your loan officer. Each lender is approved for specific programs. Ask which ones they can actually close.
- Is it a grant or a loan? If a loan, when is it forgiven or repaid?
- Does it come with a higher interest rate? Compare the total cost, not just the cash.
- What are the income and purchase-price limits?
- Do I need to take a homebuyer education class? (Many do. Ask if an approved class certificate is required.)
- What happens if I sell or refinance within five years?
Gifts and seller credits
How much cash will you need?
Hypothetical example for education only. Closing costs vary by state, lender and price, and assistance programs have their own eligibility rules. A Loan Estimate from a lender gives you the real figures.
Ask every lender to itemize its own fees, such as processing, underwriting and document preparation. They vary from lender to lender, and every dollar you don't pay is a dollar you don't have to save.
Pro tipModule 4 quiz
FHA, conventional, VA, USDA and Non-QM, side by side
Each program was built for a different kind of buyer. Pick the wrong one and you can pay thousands more over the life of the loan.
The big five compared
| FHA | Conventional | VA | USDA | Non-QM | |
|---|---|---|---|---|---|
| Backed by | HUD / Federal Housing Administration | Fannie Mae or Freddie Mac | Department of Veterans Affairs | Department of Agriculture | Private investors |
| Min. down | 3.5% (580+) | 3% first-time buyers | 0% | 0% | Usually 10–20% |
| Typical score | 580+; 500 with 10% down | About 620+ | Lender set, often 580–620 | 640+ for automated approval | Varies, often 620–660+ |
| Mortgage insurance | 1.75% upfront plus 0.55% a year for most loans; life of loan under 10% down | PMI under 20% down; drops off at 78% loan-to-value | None. One-time funding fee (2.15% first use, 0% down) unless exempt | 1% upfront plus 0.35% a year | Usually none, but higher rates |
| Typical max DTI | 43%, up to about 57% with strong files | Up to 50% with automated approval | 41% guideline plus a residual income test | 29% / 41% | Up to about 50% |
| 2026 loan limit | $541,287 to $1,249,125 depending on county | $832,750 in most counties; higher in high-cost areas | No limit with full entitlement | No set limit; income limits apply | Can exceed conforming limits |
| Best for | Lower scores, higher DTI, small down payment | Good credit, ability to drop MI later | Veterans, active duty, eligible surviving spouses | Moderate-income buyers outside big cities | Self-employed, investors, unusual income |
Figures as of October 2026. 2027 loan limits are usually announced in late November.
How each one works
Same house, four loans
Enter a price and rate to see how the monthly payment changes by program at each program's minimum down payment. The difference is mostly mortgage insurance and fees.
Hypothetical example for education only, not an offer of credit or a rate quote. Uses the same assumed rate for all four; real rates and APRs differ by program, lender and borrower. FHA, VA and USDA upfront fees are added to the loan. Conventional PMI estimated at 0.5% a year at 3% down; actual PMI depends on credit score. VA assumes first use and no exemption.
Program finder
A starting point for your conversation with a loan officer, not a decision.
Module 5 quiz
From "I'm thinking about it" to keys in hand
The typical purchase takes 30 to 45 days from accepted offer to closing. Here's every step, what to gather, and the mistakes that sink loans at the last minute.
Ten steps to closing
- Before you shopGet pre-approved. A loan officer reviews your credit, income and assets and issues a letter. Sellers rarely take an offer seriously without one. Pre-qualification is weaker: it's based on what you say, not documents.
- Before you tourChoose your agent and sign a buyer agreement. Since August 2024 you sign a written agreement before touring homes, stating what your agent is paid. You can negotiate it, and you can ask the seller to cover it in your offer.
- Weeks to monthsShop and make an offer. Your agent writes the offer, including price, earnest money, seller credits and contingencies.
- Day 1–3Offer accepted. Deposit earnest money with the title or escrow company.
- Within 3 business days of applyingGet your Loan Estimate. A standard three-page form showing your rate, payment and closing costs. Compare it across lenders.
- Day 1–10Home inspection. Find problems, then negotiate repairs or credits within your inspection period.
- Day 7–21Appraisal. The lender's appraiser confirms the home is worth the price. A low appraisal means renegotiating or bringing more cash.
- Day 7–30Underwriting. The underwriter verifies everything and may ask for more documents. Answer fast.
- 3 business days before closingReview your Closing Disclosure. Compare it to the Loan Estimate. Ask about anything that changed.
- Closing dayFinal walk-through, sign, and get your keys. Bring ID and wire your funds only after confirming instructions by phone with your title company.
Your pre-approval checklist
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How loans fall apart at the last minute
Wire fraud is real
- Criminals send fake emails that look like they're from your title company, agent or lender, with new wiring instructions.
- Always call your title company at a number you already have, not one from the email, before wiring money.
- Wiring instructions almost never change at the last minute. If they "changed," stop and call.
Get Loan Estimates from at least two or three lenders on the same day. Compare page 2, the closing costs, not just the rate. That's where fees differ most.
Pro tipModule 6 quiz
Get free help
Real estate questions go to a licensed real estate agent. Loan questions go to a licensed loan officer. Talking to either one costs nothing.
Realty85 and Ellie Mortgage share common ownership, so a referral between them may give the owners a financial benefit. You are not required to use Ellie Mortgage to buy or sell a home with Realty85, or to use Realty85 to get a loan through Ellie Mortgage. You're free to choose any real estate brokerage and shop for any mortgage provider. If you're referred, you'll get a written disclosure with estimated charges. Read all disclosures
What to have ready
Make Educate85 your own
Put your name and contact details on the course and add your partner if you have one. You'll get a personal link to send clients. Your name appears in the header, on the home page, on the help page and in the footer. The lessons and every disclosure stay the same for everyone.
I am a
About you
Your Ellie Mortgage loan officer
Your page
Keep the welcome message about you and your service. Don't include rates, payments, down payment amounts, fees or promises about loan approval. That kind of language triggers federal lending disclosures.
Confirm and create your link
Your entries are saved in this browser so you can come back and edit them. Nothing is sent anywhere; your details live inside the link itself. If you change anything, the link changes too, so send clients the new one. For a Spanish link, switch the language menu above to Español and create the link there.
Licensing and disclosures
Last updated October 20, 2026
About Educate85
Educate85 is a free homebuyer education program sponsored by Ellie Mortgage, LLC and Realty85, which share common ownership. It is for general education only. It isn't an offer of credit, a commitment to lend, a loan approval, or legal, tax, financial or credit-counseling advice.
Mortgage licensing
Ellie Mortgage, LLC, NMLS #2414813, 8180 N Hayden Rd, Suite D107, Scottsdale, AZ 85258, (480) 565-4155. Licensed in Arizona, Colorado, Indiana, Kentucky, Tennessee and Texas. Arizona Mortgage Broker License MB-1041734. Ellie Mortgage is a mortgage broker, not a lender: it arranges loans that are funded by third-party lenders. Mortgage services are offered only where Ellie Mortgage is licensed. Any loan officer named on this site is a loan originator sponsored by Ellie Mortgage and is listed with their individual NMLS ID. You can verify any company or loan officer at www.nmlsconsumeraccess.org.
Affiliated business arrangement
Realty85 and Ellie Mortgage share common ownership. Because of this relationship, a referral from Realty85 or one of its agents to Ellie Mortgage, or from Ellie Mortgage or one of its loan officers to Realty85, may give the companies, their owners, agents or loan officers a financial or other benefit. You are not required to use Ellie Mortgage as a condition of buying, selling or refinancing a home through Realty85, and you are not required to use Realty85 as a condition of getting a loan through Ellie Mortgage. Other real estate brokerages and mortgage providers are available, and you're free to shop around for the best services and rates. If you're referred between the two companies, you'll get a written Affiliated Business Arrangement Disclosure with estimated charges at or before the time of referral.
Real estate agents
Real estate services are provided by Realty85 and its licensed agents. Arizona: Realty85, LLC, License LC637539000, Designated Broker Jacob R. Chapman, BR583358000 · Colorado: Realty85, Real Estate Company License EC.100100025 · Indiana: Realty85 LLC, Real Estate Broker Company License RC52200200 · Kentucky: Realty85, Registered Firm Branch License 267772, Principal Broker James F. Davila, License 182572 · Tennessee: Realty85, Real Estate Firm License 266571, Principal Broker Martha M. Brace, License 374311 · Texas: Realty 85 LLC, License 9012642, Designated Broker Marvin Ridgeway, License 738669. Real estate agents are not licensed mortgage loan originators. They don't take loan applications or offer, quote or negotiate loan terms. Loan questions are answered by a licensed loan officer.
Examples and program information
Calculator results, payment comparisons, rates, down payments and other figures on this site are hypothetical examples for education. They aren't advertisements or offers of any specific loan terms. Actual rates, annual percentage rates (APR), payments, fees and terms depend on the lender, the loan program and the borrower's credit, income, assets and property, and not everyone will qualify. Payment examples may not include taxes, insurance or mortgage insurance unless shown, so actual payments may be higher. Program guidelines, loan limits, fees and minimums come from public agency sources as of October 2026 and can change at any time.
Not housing counseling
Educate85 is not a HUD-approved housing counseling program and doesn't issue a completion certificate. If a down payment assistance or loan program requires homebuyer education, ask the program which courses it accepts. To find a HUD-approved housing counselor, visit hud.gov/findacounselor or call 800-569-4287.
Credit information
Credit information is general education about how scoring and reporting work. Neither Educate85, Ellie Mortgage nor Realty85 provides credit repair services. You can get free credit reports at AnnualCreditReport.com.
Your privacy
The course pages don't ask for personal information. If you signed up for the course, we record when you finish all six modules so we can follow up and apply the graduate offer. Numbers you enter in the calculators stay in your browser and are not sent to anyone. Checklist and quiz progress is saved only in your own browser. If you contact an agent or loan officer, their own privacy practices apply.
Texas consumer complaint and recovery fund notice
Consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the Texas Department of Savings and Mortgage Lending, 2601 North Lamar, Suite 201, Austin, Texas 78705. Complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov. A toll-free consumer hotline is available at 1-877-276-5550. The department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. A written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. For more information about the recovery fund, please consult the department’s website at www.sml.texas.gov.
Texas real estate notices
Texas buyers: see the Texas Real Estate Commission Information About Brokerage Services and Consumer Protection Notice.
Government programs
Ellie Mortgage, LLC is not a government agency and is not affiliated with HUD, FHA, VA, or any other government agency. FHA loan products are insured by the Federal Housing Administration. VA loan products are guaranteed by the U.S. Department of Veterans Affairs. Program availability, eligibility, and underwriting requirements apply.
Equal housing opportunity
Realty85 and Ellie Mortgage do business in accordance with the Federal Fair Housing Act and the Equal Credit Opportunity Act. We don't discriminate on the basis of race, color, religion, national origin, sex, sexual orientation, gender identity, disability, familial status, marital status, age, or receipt of public assistance. Equal Housing Opportunity.