Paying for a Home

When you purchase a home, you will need money to cover several up front costs. It is important to know the costs your will be incurring, so you can plan wisely.

Overview of Up-Front Costs

The largest cost is the down payment. This will be 3 to 20% of the purchase price of the home. The greater your down payment is, the lower your interest rate and better deal the house will be.

The second expense is closing costs. These are 1 to 8% the price of the home. Sometimes this will not need to be paid in cash, as the bank will add this expense to your mortgage. Be sure to check with your bank beforehand!

Lastly, there are miscellaneous costs. This category includes fees for applications, credit reports, home inspection, and appraisal. When you add these three costs together, that will total the money needed to purchase a home at the beginning. For a $150,000 dollar home, up-front costs can run from just under $5000 to nearly $43,000.

Long-Term Costs

Apart from the upfront costs, long term costs will be incorporated in a mortgage. A mortgage is a loan from a bank to pay for a house. There are several items necessary to qualify for a mortgage. First, is money to make the down payment. Secondly, your income must usually be two to three times higher than the mortgage payment. Thirdly, you must have been employed continuously for two years. Lastly, your credit needs to meet the requirements set by the lender.

Contact Us

For more information on payment options for your home, contact Texas Mortgage Refinance Loans today.