A home may be the biggest investment you’ll ever make, and smart budgeting from the outset can save you a lot of headaches as a future homeowner. Here are five questions to ask yourself to help determine just how much house your budget will buy:
1. How strong is my financial history?
Make sure your credit score is in good standing before you set out to buy a home. The higher your credit score, the more likely you’ll qualify for a lower interest rate, which could save you thousands of dollars over the life of your mortgage.
2. What mortgage product is right for me?
A 30-year mortgage typically has lower monthly payments, but you’ll end up paying more interest over time than if you opt for a 15-year mortgage. Weigh your options to find the right fit.
3. How much should I put down?
A 20 percent down payment will help you avoid private mortgage insurance (PMI), but waiting to accumulate that sum could mean you’ll pass up good opportunities. Ask your lender about programs that have low down payment requirements (some require as little as 3 percent, and others zero), and check out down payment assistance programs for first-time buyers and borrowers with low to moderate income.
4. What home price can I afford?
If crunching numbers isn’t your strong suit, enlist the help of an online home affordability calculator. Simply enter your annual income, monthly debts and expected down payment, and get a sense of the price range that can fit comfortably within your budget.
5. What housing expenses should I include in my budget?
In addition to your down payment, mortgage principal and closing fees, you’ll want to budget for interest, taxes and insurance. Don’t forget to also account for utilities, HOA fees, repairs and regular maintenance.
Get started today. Whether you’re just getting started or ready to take the next step, SunTrust Mortgage is here to help.
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