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PMI (Private Mortgage Insurance) is insurance that protects the lender if you default on your loan. You're required to pay PMI when your down payment is less than 20% of the home's purchase price. ...
Read moreA common guideline is the 28/36 rule: your monthly housing payment (PITI) shouldn't exceed 28% of your gross monthly income, and your total debt payments (including housing, car loans, credit cards...
Read moreThe interest rate is the cost you pay each year to borrow money, expressed as a percentage of the loan amount. The APR (Annual Percentage Rate) includes the interest rate plus other costs like orig...
Read moreA mortgage estimator provides quick, simplified calculations to help you understand approximate monthly payments and affordability. It's designed for early-stage home shopping when you need rough n...
Read moreMortgage estimates are designed to be approximately 85-95% accurate for basic planning purposes. The estimate accurately calculates principal and interest based on the inputs you provide, but the f...
Read moreUse current market mortgage rates, which you can find on financial websites or by checking with lenders. As of recent trends, rates typically range from 6-8% for conventional 30-year fixed mortgage...
Read moreYour mortgage payment is just one part of homeownership costs. Budget an additional 40-50% on top of your mortgage payment for other expenses. This includes property taxes (1-2% of home value annua...
Read moreThis depends on your financial situation and risk tolerance. Putting down 20% or more eliminates PMI (saving $100-300/month), gives you instant equity, may qualify you for better interest rates, an...
Read moreUse a mortgage estimator in the early stages: when you're just starting to think about buying, browsing homes online to understand price ranges, determining your budget before house hunting, or com...
Read moreYour monthly mortgage payment consists of four main components, often called PITI: (1) Principal - the amount that goes toward paying down your loan balance, (2) Interest - the cost of borrowing mo...
Read morePITI stands for Principal, Interest, Taxes, and Insurance - the four components of your monthly mortgage payment. Principal is the amount applied to your loan balance. Interest is the cost of borro...
Read moreA safe rule of thumb is that your total monthly housing payment (PITI) should not exceed 28% of your gross monthly income, and your total debt payments (including housing) should not exceed 36% of ...
Read moreYour down payment directly reduces your loan amount, which lowers your monthly payment and total interest paid. Additionally, putting down 20% or more eliminates PMI (private mortgage insurance), w...
Read moreA fixed-rate mortgage maintains the same interest rate for the entire loan term (typically 15 or 30 years), meaning your principal and interest payment never changes. This provides predictability a...
Read moreProperty taxes and insurance can add 30-50% to your base mortgage payment. Property taxes vary widely by location (0.3% to 2.5% of home value annually) and are typically collected monthly in escrow...
Read moreThis depends on your financial goals and cash flow. A 15-year mortgage has higher monthly payments but dramatically lower total interest costs and builds equity twice as fast. 15-year mortgages als...
Read moreRefinance when you can lower your rate by 0.5-1%+ and your break-even point is under 3-5 years. For example, if refinancing costs $7,000 and saves you $427/month, you break even in 16 months—an exc...
Read moreBreak-even formula: Total Closing Costs ÷ Monthly Savings = Months to Break Even. Example: $7,000 in costs ÷ $427/month savings = 16 months. If your break-even is under 24 months, it's typically ex...
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