How much house you can afford
The first step toward finding the right home is to quickly compute your purchasing power and determine how much you can afford to pay each month. This saves you time by allowing you to focus on homes in your price range. In addition, in the planning stage, you should consider both the up-front and ongoing costs associated with purchasing a home.
Some up-front costs include:
Down payment: Typically ranges from 3-30% of the cost of
the house. The more you can put down, the greater equity you
will have in your home and the lower your monthly payment will
be. For down payments less than 20% you may also need to pay
mortgage insurance.
Closing Costs: Typically range from 2-6% of the loan
amount depending on your area.
On-going Costs: Your housing costs can include the
following: monthly mortgage payment, homeowners insurance,
mortgage insurance, flood insurance (if applicable), property
taxes (if applicable), utilities, maintenance.