There is the cost of the home then there are “other” cost that make up how much you will need to borrow, which can determine the type of mortgage that fits your needs and your budget.
Mortgages can be paid in two ways: upfront and over time. When choosing a mortgage, it’s important to look at both types of costs. A mortgage with a lower monthly payment may have higher upfront costs, or a mortgage with low upfront costs may have a higher monthly payment.
Monthly costs. Your monthly payment will typically contain four elements:
In addition, you may pay for condominium or homeowner’s association dues. These costs are usually paid separately from your monthly payment.
Upfront costs. In addition to your down payment, you have to pay for several different kinds of costs at closing that help protect against your largest investment.
Your lender is required to outline your closing costs in the Loan Estimate and this Closing Disclosure you receive before the big settlement day. Take the time to review them closely and ask questions about things you don’t understand.
The more you know, the more you can make an educated decision about the mortgage that is right for you. The MTC Federal experts can help with additional information and resources. Use our mortgage calculator to determine how much you can afford.
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