How Much You’re Borrowing?
Remember: When you’re starting out, most of your monthly payment will be going toward paying interest. If you’re deciding on a loan, calulate how much you need to borrow, and then research rates. If you’re principle is going to be high, consider ways to contribute funds to the principle only, to lower your payments.
Private Mortgage Insurance (PMI)
If you’re not putting at least 10-20% on a down payment, you’re probably going to need PMI. PMI is deemed necessary until you own at least 20% equity in your home or if your credit is less-than-perfect. PMI can be calculated as a percentage of your principle balance. Other times, it’s a flat fee
Real Estate Tax and Local Tax Rate
There is more to owning a home than just paying the mortgage. Make sure you know what the taxes amount to in your particular area. Then, determine at what value your prospective property or current residence is appraised.
How Long You Plan On Occupying Your Home
It’s important to plan ahead. Do you picture yourself living in this house five, ten, or thirty years from now? While it’s impossible to know exactly, take some time to envision where you’ll be in a few years by making some educated predictions. There are loans better suited for short stays, like ARMs , and others that benefit long-term ownership, such as FHAs or conventional loans.