Calculate your monthly mortgage payments, total interest, and create an amortization schedule
Putting down 20% or more helps you avoid PMI (Private Mortgage Insurance), saving you hundreds per month.
Keep housing costs under 28% of gross income and total debt under 36% for better loan approval chances.
Making one extra payment per year can reduce a 30-year mortgage by 4-6 years and save thousands in interest.
A 0.5% difference in interest rate can save tens of thousands over the loan term. Shop multiple lenders.
Get pre-approved before house hunting to know your budget and strengthen your offer when you find the right home.
Remember to budget for closing costs (2-5% of home price), moving expenses, and initial repairs/upgrades.
A general rule is that your home price should be 2.5-3 times your annual income. However, consider your total monthly obligations, down payment amount, and emergency savings. Use the 28/36 rule: housing costs shouldn't exceed 28% of gross monthly income.
Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home price. It typically costs 0.5-1% of the loan amount annually. PMI can be removed once you reach 20% equity in your home.
Fixed-rate mortgages maintain the same interest rate for the entire loan term, providing payment stability. Adjustable-rate mortgages (ARMs) start with lower rates that adjust periodically. Fixed rates are better for long-term stability, while ARMs may benefit short-term owners.
Extra payments go directly to principal, reducing interest over the loan's life. Even small additional payments can significantly shorten your loan term. For example, paying an extra $100/month on a $300,000 mortgage could save over $60,000 in interest.
Conventional loans typically require a minimum credit score of 620, though 740+ gets the best rates. FHA loans accept scores as low as 580 with 3.5% down, or 500 with 10% down. VA and USDA loans have varying requirements.
Closing costs typically range from 2-5% of the home price and include appraisal fees, title insurance, attorney fees, origination fees, and prepaid items like property taxes and insurance. Some costs are negotiable or can be covered by the seller.