Okay, you've done your budget homework and you decided you are ready to buy a home. How much money should you have for a downpayment?
If your downpayment is less than 20%, you will be required to carry Mortgage Insurance. This can add approximately $100 per month. (This amount is based on your credit and can be lower or go higher)
Before you go shopping and fall in love with that perfect house let's stop and think:
A typical starter home in Collin County can start at $130,000.
Let's say you have been saving like crazy for your nest!
With 20% Down
$130,000 x .20 = $26,000 = 20% downpayment on $130,000 home
Your loan amount would be $130,000 - $26,000 = $104,000
$104,000 borrowed at a fixed rate of 6% over a 30 year loan would make your payment approximately $620.
With 10% Down
$130,000 x .10 = $13,000 = 10% downpayment on $130,000 home
Your loan amount would be $130,000 - $13,000 = $117,000
$117,000 borrowed at a fixed rate of 6% over a 30 year loan would make your payment approximately $700.
DON'T FORGET! This is where your Mortgage Insurance comes in. Add in approximately $100 to your $700 payment and now your payment is approximately $800.
But wait, there's more!
Next time - Property Taxes and Insurance
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