Length of your home loan
Before signing on the dotted line, you can choose how long you want your loan to be. Home loan terms can vary – depending on what you can afford each month and which interest rate you prefer. Typically, if the length of your loan is longer, it will have a higher interest rate.
Property Tax
Tax isn’t a fun topic to talk about, but it’s very important to understand before purchasing your first home. You’re typically asked to pay your property tax every six months, and it could be around 2% of your property value. This cost can add up pretty quickly, so you can either budget for the expense yourself, or escrow it with the bank. Escrowing your property tax means it’s added to your mortgage payment, and the bank will take care of paying your property tax when it’s due. Out of sight, out of mind.
Homeowners’ Association
Some housing developments have a Homeowners’ Association. This can cost a couple hundred bucks each month, so it’s important to know what the association is responsible for. If your property is a part of a Homeowners’ Association, make sure you read the bylaws and plan accordingly.
Homeowner’s Insurance
Making sure your property is covered is very important when purchasing your first house. If the unexpected happens, you want to have some financial backing. Be diligent when reading over your insurance policy to make sure you’re covered.
Closing Costs
There are certain costs that are involved when you close on a home purchase – document preparation, attorney fees, appraisals, etc. These can add up, so make sure you’re aware of the cost before you commit to purchasing the house.
Purchasing a home may be one of the biggest costs of your life, but it can also be one of the most rewarding. It’s where you spend most of your time, where you raise your family, and where you invite your friends - so we want to make sure you’re making the best choice for your situation!
If you are curious how much house you can afford, check out our mortgage calculator and contact one of our lenders. Learn more