When starting your house hunt online, you'll see that most real estate websites let you search by price range. But a real estate purchase will cost you more than just the sale price. Here are four costs you'll want to consider before submitting an offer.
- Downpayment Some lenders require borrowers to pay up to 20% of the loan at closing. It may take a while to save up that much, but paying a chunk of your loan up front will lower your monthly payment.
- Mortgage insurance If you don't pay at least 20% of the purchase price as a downpayment, your lender will probably require you to pay private mortgage insurance (PMI) that protects the lender if you default on the loan.
- Closing costs Buyers and sellers can negotiate how much each party pays at closing. Unless the seller agrees to pay all of the closing costs, you'll be responsible for paying a portion of these fees.
- Monthly payment Your payments will cover principal, interest, taxes, and insurance. You may have other recurring expenses, such as HOA dues and home maintenance, to factor into your budget.
When you're ready to become a homeowner, contact a Texas REALTOR® to determine how much you can realistically afford and which costs you can negotiate.
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