| Before you start looking at property,
it's a good idea to find a target price range that you
can afford. A mortgage lender will want to make sure you
can qualify for the down payment, plus a monthly mortgage
payment made up of principal, interest, taxes and insurance
(PITI).
Interest rates and your personal finances
will influence the amount of house or land you can afford.
In addition to the mortgage you borrow from a lender,
normally you will be required to make a cash down payment
- a percentage of the purchase price that you pay for
the home or land. Conventional loan down payments range
anywhere from 5 to 20%, depending on the requirements
of your lender. There are also specialized loan programs
that allow for as little as 3% down for those who qualify.
A higher down payment often allows the lender to be
more flexible with a loan package, including interest
rates and closing costs. In addition to the down payment,
you will need to have cash available to pay closing
costs.
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