There are many expenses that come with buying a home. The following list is a good example of what to expect:
Down payment - A minimum of 20% of the home's purchase price is usually required for the best loan terms and to avoid paying private mortgage insurance (see below), but it's entirely possible to buy a house with a smaller down payment.
Monthly mortgage payments - Include loan principal, interest, and sometimes additional charges for taxes and insurance.
Property taxes - Amounts vary, but the average is around 1.5% to 2% of a home's purchase price.
Homeowners insurance - Again, the cost varies. Call insurance companies for more information, or contact the Florida Department of Insurance for surveys of prices for insurance rates.
Private mortgage insurance (PMI) - If your down payment is less than 20% of the purchase price, this can tack several hundred dollars each year to your loan costs until the equity in your home reaches 22%, when you no longer need the insurance.
Maintenance - Varies year to year, but you may spend about 1% of the purchase price annually on maintenance and repairs.
Closing costs - Include points and other fees charged by the lender, which can add up to 3% of the amount you borrow; title insurance, from a few hundred to over a thousand dollars, depending on the purchase price of your home; inspections, about $200 to $500; and other miscellaneous fees. Many of these costs are negotiable between the buyer and seller, and are dependent on local customs. You can also negotiate with the lender to reduce, and in some cases completely waive, certain costs.
Housing expense ratio Typically, mortgage lenders won't allow these housing expenses to be more than one-third of your household monthly gross income. In other words, 28% of your monthly gross pay (for example, your annual salary divided by 12) is the usual maximum "housing expense ratio" allowed by lenders.
The "housing expense ratio" compares your monthly gross income to "PITI," an acronym for:
* Principal, or the amount you borrowed, of your mortgage loan
* Interest on the mortgage loan
* Taxes: property taxes
* Insurance: homeowners and private mortgage insurance (PMI)
Debt-to-income ratio.
On top of the 28% lenders allow for monthly housing expenses, they will usually let you spend another 10% for other debt repayments such as student loans, car loans and other similar loans. Added together, your housing expense ratio and monthly recurring debts make up your "debt-to-income ratio," and should not be higher than 38% of your monthly gross pay.
Now the Good News
The good news is that there are tax benefits to owning a home. The IRS lets you deduct mortgage interest and real property taxes, within limits, on your annual income tax return! Contact a real estate or tax attorney for the specifics in your area.
Genesis Font is an SEO and Developer for LoansInteractive.com> Mortgage and Loan Officer Websites. We also offer Quality Web Hosting Services.
The Internet is a powerful marketing tool, but just how... Read More
Once relegated to the classified advertising section of the local... Read More
Property Investing Secrets: When you Make Property Easy to Buy... Read More
Like a monarch, Red Haring reigned in the deep leather... Read More
If you're looking for the 'real' Spain where the culture,... Read More
Real estate investments come through a variety of different options.... Read More
PrefaceWe are For Sale By Owners, "FSBOs." We spend our... Read More
Every year hundreds of thousands of foreign visitors travel to... Read More
In his recent testimony, Alan Greenspan warned against the possiblity... Read More
Equity lender, hard money lender, private investor or what ever... Read More
When it comes to buying investment real estate, there are... Read More
Being a real estate investor is not really that hard,... Read More
The real estate market buzz across the country these days... Read More
An example of seller financing: Years ago I bought a... Read More
In today's tight housing market, many buyers are looking for... Read More
If you are thinking about selling your house, you should... Read More
Is a sharp correction in store for the real estate... Read More
The prospect of shopping for a new construction residence can... Read More
Are we in a housing bubble? To answer that question... Read More
Whether you are selling a house, townhouse, condo or apartment,... Read More
"CMA" is an abbreviation real estate agents use for a... Read More
Title insurance is generally associated with insuring a purchaser's or... Read More
Cyprus is situated in the north-east Mediterranean on the crossing... Read More
New Marketing and Design Psychology ideas help you stage homes... Read More
There are mobile homes for sale, for much less than... Read More
"Use your home's equity to pay off your debt. It's... Read More
In many places you can buy a house and a... Read More
Most people get involved in Real Estate investing to make... Read More
Today we discuss escalation clauses because much of the country... Read More
Over the last two years there has been so much... Read More
In the sales contract, the sellers of your new home... Read More
Let's say you've had your home on the market for... Read More
Investing in real estate is more complex than simply buying... Read More
Don't be tempted by "We Buy Houses" or "Sell Your... Read More
As a successful Boston real estate agent, it always puzzled... Read More
Doesn't it seem like everyone you know has a friend,... Read More
Many real estate agents begin and sometimes sadly end their... Read More
If you plan on getting the most from the sale... Read More
We all have had the experience of someone important coming... Read More
Negotiation is where many FSBO home sellers really have problems.... Read More
Real Estate: Reasons and Priorities for Purchasing Property. It's not... Read More
We understand the being in foreclosure is a scary thing.... Read More
It's probably happened to you...Folks learn that you know something... Read More
So, your selling your home. Prepare yourself both physically and... Read More
When painting your home for resale, choosing the right colors... Read More
Equity is the value of your home minus what you... Read More
Staging can involve minimal effort on the part of a... Read More
There are two sides to a feasibility study and in... Read More
We are selling our house. We have lived here for... Read More
With new destinations such as Bulgaria, Slovenia and Croatia offering... Read More
What's the difference between death and taxes?Death doesn't change every... Read More
Purchasing a home is a major emotional and financial decision.... Read More
Whether you're a first-time buyer, selling your current home or... Read More
Turn the Television on any Sunday morning and you'll find... Read More
Human nature being what it is, none of us can... Read More
The physical senses of buyers respond to a home's design,... Read More
Most business owners will, at some point, want or need... Read More
Follow a few simple guidelines, and marketing your own home... Read More
Once relegated to the classified advertising section of the local... Read More
Many would-be real estate investing professionals face discouragement because of... Read More
You've searched high and low around town looking for that... Read More
When it comes to home buying, the ideal situation would... Read More
Never has there been such an ambitious and creative drive... Read More
There are several small businesses that retain hundred year old... Read More
Owning a house is part of the American Dream. Depending... Read More
Many of us dream about owning the vacation home in... Read More
Real Estate |