Purchasing a home is a very exciting time.
Being well prepared will help you make better decisions. Buying a home offers many advantages, one of the most significant being that it allows you to build equity (ownership) when you pay your mortgage each month. A common myth is that monthly mortgage payments are more expensive than rent. But, in many cases, mortgage payments can be even less than rent.
How much house can you afford?
The first step toward finding the right home is to quickly compute your purchasing power and determine how much you can afford to pay each month. This saves you time by allowing you to focus on homes in your price range. In addition, in the planning stage, you should consider both the up-front and ongoing costs associated with purchasing a home.
Some up-front costs include:
Down Payment
Typically ranges from 3.5-30% of the cost of the house. The more you can put down, the greater equity you will have in your home and the lower your monthly payment will be. For down payments less than 20% you may also need to pay mortgage insurance.
Closing Costs
Typically range from 2-6% of the loan amount depending on your area.
On-Going Costs
Your housing costs can include the following:
monthly mortgage payment
homeowners insurance
mortgage insurance (if applicable)
flood insurance (if applicable)
property taxes (if applicable)
utilities & maintenance
Get a No-Obligation Rate and Closing Cost Analysis!
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Lower Your Mortgage Payments
A lower monthly mortgage payment can help free-up money so you can save, invest or use for other expenses. When rates are favorable, refinancing to a lower rate or longer-term mortgage can keep more money in your pocket every month.
It's A Great Time To Refinance
Changing the terms of your loan can decrease your monthly payments, eliminate mortgage insurance and free up your home equity. The cash out from your home equity can be used to pay down your credit card balances, car loans or student loans and for home improvement projects.