Don’t Miss the Other Hidden Costs of Buying a Home!
The latest numbers show interest rates for mortgages are nearly one percent higher than this time last year.
While that may seem insignificant, for the average homebuyer, it can cost them an additional $60-75,000 over the life of the loan. But interest rates alone are not the only expenses in home buying.
While some of the costs are upfront and generally well-known, such as the earnest money deposit (EMD) or down payment, most additional costs are unknown to the masses.
Financial experts recommend putting down 20% of a home’s purchase price, giving a total loan-to-value (LTV) of 80%. Having an LTV of 80% for a conventional loan means mortgage insurance is not needed.
Mortgage insurance (MI) is one of the hidden costs that fluctuate depending on loan factors, including credit score, loan amount, and debt-to-income (DTI) ratio.
For FHA loans, mortgage insurance is included in the total loan amount and is required regardless of the LTV.
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