mortgage payment influencers

purchase price | The most obvious influence of your monthly mortgage payments will be your home’s purchase price. Before you go out looking, it helps to know how much you are pre-qualified to borrow from a lender. This is typically a quick & painless process with a qualified lender and is roughly based on your gross income minus your monthly minimum debt payments. Lenders will look to keep your debt to income ratio under 40%.

down payment | Typically a down payment is required to purchase a home indicating your both your commitment and financial stability to both lenders and sellers. Although most people think it is required to put down 20% of the purchase price, you can get a loan with as little as 5% for a conventional mortgage, 3.5% for a FHA or even 0% for a VA Loan. That being said, the larger your down payment the lower risk you will appear to both sellers & lenders putting you in a great position for lower interest rates, lower mortgage payments and in competitive markets, your offer will stand out to sellers as being less risky.

interest rate | To find the best mortgage rate, shop around with at least three different lenders to compare products and rates. Typically, the higher your credit score, the less debt you have and the more money you have available for your down payment, the more competitive interest rates lenders can offer. Interest rates are set by the federal government and can fluctuate over time. Learn more about current interest rates.

 

Additional Mortgage Costs

homeowners insurance | covers your property and personal belongings if they’re damaged or stolen, but not all weather damage and theft is covered. Once you are under contract on a home, you will need to shop for a homeowners policy. Average costs in Colorado, Connecticut & New York are all ~$1400 annually or $112 monthly. Bundling with your auto insurance can help bring down costs on both policies.

 

mortgage insurance | Mortgage insurance protects the lender. You'll have to pay for it if you get an FHA or USDA mortgage or put down less than 20% on a conventional loan. ... Mortgage insurance makes it possible to hand over a much smaller down payment and still qualify for a home loan. It protects the lender in case you default on the loan.if you are unable or choose not to put down 20% of the purchase price, mortgage insurance will most likely be included in your monthly payment until you have 20% equity in your home through payments or refinance.

 

property taxes | these also vary dramatically based on where you purchase your home. Each state and town calculate these differently but typically you can find history of property taxes on your home search sites or town records.