4 costs homebuyers should consider from the start
08/15/2014 | Author: Jaime Lee
If you're using the Internet to start your search for a new home, you know that most home-search websites let you search by price range. But a real estate purchase will cost you more than just the sale price. Consumer Affairs explains four of the costs homebuyers should consider before submitting an offer.
- Downpayment Some lenders require a 20% downpayment at closing. While it can take time to save up that much, paying a lump sum up front will lower your monthly payment.
- Monthly payment Your payments will cover principal, interest, taxes, and insurance. You may also have other recurring expenses, such as HOA dues, that you should factor into your budget.
- Mortgage insurance If you don't pay at least 20% of the purchase price as a downpayment, your lender will probably require you to pay private mortgage insurance (PMI). This isn't insurance for you—it protects the lender if you default on the loan.
- Closing costs A buyer and a seller can negotiate how much each party pays at closing. But unless the seller agrees to pay all of the closing costs, you'll be responsible for paying a portion of these fees.
When you're ready to become a homeowner, contact a Texas REALTOR® to determine how much you can realistically afford.
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