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Down Payment
The typical rule of thumb is to pay 20 percent of the home's price as your down payment, although some conventional mortgage loans require as little as 3.0 percent down. Your down payment reduces the total amount of your mortgage loan, so the more money you put down, the lower your payments will be - or the more expensive a house you can buy. There are special mortgage loans for veterans and first time home buyers that require no down payment at all.
Loan Term
Your loan program can affect your interest rate and monthly payments. Choose from 30-year fixed, 15-year fixed, and more in our mortgage calculator.
Loan Type
There are several types of mortgage loans, but the most commonly used are fixed-rate and adjustable-rate loans. Fixed-rate loans have the same interest rate for the entire duration of the loan. That means your monthly payment will be the same, even for long-term loans, such as 30-year fixed-rate mortgages. Two benefits to this loan type are stability, and being able to calculate your total interest up front. Adjustable-rate mortgages (ARMs) have interest rates that can change over time. Typically they start out at a lower interest rate than a fixed-rate loan, and hold that rate for a set number of years, before changing interest rates from year to year. For example, if you have a 5/1 ARM, you will have the same interest rate for the first 5 years, and then your interest rate will change from year to year. The main benefit of an adjustable-rate loan is starting off with a lower interest rate.
Interest Rate
An interest rate is the the amount of interest due per period, as a proportion of the amount lent. The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited, or borrowed.
Property Tax Rate
Most local governments in the United States impose a property tax, also known as a millage rate, as a principal source of revenue. The tax is nearly always computed as the fair market value of the property times an assessment ratio times a tax rate, and is generally an obligation of the owner of the property. Values are determined by local officials, and may be disputed by property owners. For the taxing authority, one advantage of the property tax over the sales tax or income tax is that the revenue always equals the tax levy, unlike the other taxes. The property tax typically produces the required revenue for municipalities' tax levies. A disadvantage to the taxpayer is that the tax liability is fixed, while the taxpayer's income is not.
Home Insurance
Home insurance, also commonly called homeowner's insurance, is a type of property insurance that covers a private residence. It is an insurance policy that combines various personal insurance protections, which can include losses occurring to one's home, its contents, loss of use (additional living expenses), or loss of other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home or at the hands of the homeowner within the policy territory. Additionally, homeowner's insurance provides financial protection against disasters. A standard home insurance policy insures the home itself along with the things kept inside.
HOA Fees
A homeowners association fee (HOA fee) is an amount of money that must be paid monthly by owners of certain types of residential properties, and HOAs collect these fees to assist with maintaining and improving properties in the association.
