Low Numbers

Yes, low numbers can be exciting....especially when they are lower than your current rent. But, wait a moment. We aren't done yet. (Sorry!)

Wow! That's Less Than My Rent

Ooops! You still have a few things to add.

Don't run to your real estate agent based on these numbers yet.

Don't forget that you'll pay property taxes and homeowners insurance on top of that figure. Tax rates are set locally and both the insurance premium and tax payment will vary according to the cost of your home. In addition, you might need to pay private mortgage insurance (PMI) if you put less than 20% down.

Calculate the Add-ons

This means adding all those other numbers that are bound to occur.

To cover these expenses, multiply the purchase price by .002% (two-tenths percent), and add that figure to your monthly principal and interest payment, just to be safe. In the above example for a $90,000 home, that equals $180 on top of $587 for a total monthly cost of $767. Remember also the additional expenses of maintenance and repair.

Click here to determine whether you should rent or buy. Our calculator can determine the financial answer for you.

Okay, So Two Quizzes Down

Now, let's take a look at how lenders operate and how well you will fare in their eyes.

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