Buying a Home – What you need to know

How Much House Can You Afford? Most important thing to know: What is your price range? Found by figuring out the following: Down Payment Monthly Home Payment You Can Afford – Monthly Taxes How the monthly payment translates to home price (formula: monthly payment divided by current payment per thousand multiplied by 1000

Down Payment Down Payment: Can be as low as 0% for some military Is usually as low as 3.5% for an FHA loan all the way up to 100% of the purchase price. The most important down payment benchmark to hit is 20% If you put at least 20% down on a house, you will avoid Private Mortgage Insurance (PMI). PMI is an extra payment each month to secure the bank from the possibility of you defaulting on your loan PMI is a fee that you will never receive anything in return for Benefit of PMI?

Example: Let’s See How Much of a House Someone Can Afford: Yearly Salary: $50,000 Current Mortgage Rates are 4% which means a payment of $4.77 per thousand Taxes in the area are $8000 per year This person has funds of $40,000 available for a down payment