| 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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