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Before determining what list price to target in a new home, you first must understand how much you're comfortable spending on housing per month. A common rule of thumb is to earmark 28% of your post-tax income for house payments, including your homeowner’s insurance and property tax. For example, if your annual income after taxes is $60,000, 28% of that is $16,800, or $1,400 per month. However, every situation is different. It's important to look at all your current and future financial obligations and make the right decision for your unique situation.

We've made doing the math a lot easier for you. Check out our helpful Home Affordability Calculator to assess your debt-to-income ratio, down payment, loan amount and your mortgage payment — all at once! Then, use our Customized Rate Quote tool to see current mortgage rates and your estimated monthly payment.

Not necessarily. Your credit score is only one of the factors taken into consideration when you apply for a home loan. We also review your employment history, income, debt and cash reserves. There are also different kinds of loan products that have varying requirements for your credit history.

Every home loan situation is different, so it's difficult to accurately estimate how long your home mortgage process will take. Some of the factors that affect the timeline include the type of loan, the specific term you're requesting, the amount of required documentation and the time it takes to provide your lender with those documents. Luckily, you're never alone in the process with Pennymac. Our loan officers and processing specialists will work with you every step of the way to ensure that your application is processed as efficiently as possible.

Traditional loans usually require documents that verify your employment, income and assets, and may include:

• Your Social Security number
• Pay stubs for the last two months
• W-2 forms for the past two years
• Bank statements for the past two or three months
• One to two years of federal tax returns
• A signed contract of sale (if you've already chosen your new home)
• Information on current debt, including car loans, student loans and credit cards

There is no way to know how interest rates will fluctuate at any given time, so it’s generally a good idea to lock a rate when you find a loan product that’s in line with your financial goals. To prevent ending up with a higher rate, you can lock the rate, and even the points, for a specified period. Fees may apply, but not always. If rates go down you still have options, but locking a rate will at least protect you from rising rates.

Mortgage closing costs are fees charged for services that must be performed to process and close your loan application, and they may vary depending on a variety of factors. Examples of mortgage closing costs include title fees, recording fees, appraisal fees, credit report fees, pest inspection, attorney’s fees, taxes and surveying fees. The closing cost of a loan will vary depending on your geographic location and the requirements of the loan product.

Lenders are required by law to provide you with your Loan Estimate and the Closing Disclosure to outline your closing costs and help you avoid surprises at the closing table. Your loan officer can answer any questions you have about the different closing costs associated with Pennymac’s mortgage products and what options you may have for minimizing your up-front costs.

Prepayment penalties are rare in today’s mortgages. If you manage to pay off a 30-year fixed rate mortgage in only 15 years, you come out ahead financially because you’ve reduced the amount of interest paid on the loan. Get more info on Early Payoff Options.

While 20% may be the most common down payment requirement for conventional loans, some products, like FHA loans, allow down payments as low as 3.5%. Be sure to weigh all your costs however, since loans with lower down payments can often cost more over the life of the loan.

Often loans that allow less than 20% down on your purchase require paying mortgage insurance until your loan-to-value, or LTV, ratio falls below 80%. Mortgage insurance premiums can vary, with some costing up to $100 per month for every $100,000 borrowed.