Your Monthly Mortgage Payment: Impacts Beyond the Interest Rate

 Don't Overlook the 'Other' payments

As you start your homeownership journey, the likely first stop is determining your budget for your prospective house payment. Next step, leads you towards finding yourself the best possible deal. Your next thoughts may be influenced by what you're familiar with - Interest Rates - rightfully so. After all, that's what you hear about & see the most. I will challenge you, however, to not just fixate on the interest rate. Take a holistic understanding of all factors that impact your monthly house payment.   

1. Property Taxes vary widely depending on your home's location and local tax rates. Simply put, where you buy matters. It’s essential to research property tax rates in the areas you’re considering to understand how they’ll impact your budget. Two houses on opposite sides of town, priced the exact same, at the exact same interest rate, could differ by hundreds of dollars, simply due to their respective property taxes.

2. Homeowners Insurance Your insurance premium is another key component of your monthly payment. The insurance provider you choose matters. It's suggested to get at least three separate quotes from different insurance providers. You could be settling for a policy that costs you double what another company's policy offers. 

3. Mortgage Insurance If your down payment is less than 20%, you'll need to pay for mortgage insurance (unless you're a veteran). Depending on why type of loan you get, the mortgage insurance will be either private mortgage insurance (Conventional) or a government-backed option (FHA & USDA). Your loan type matters, as either option could be more or less costly. Be sure to verify that your lender has looked at all possible loan types. 

Making Informed Decisions When budgeting for a home, it’s crucial to consider all the factors that impact your monthly payment—not just the interest rate. A holistic understanding of your mortgage payment ensures you’re financially prepared for homeownership. Schedule some time with me & let’s chat about your unique situation and how we can make your homeownership goals a reality!