Loans, Fees, and the Real Cost of Owning Your Home via @homebidz

Loans, Fees, and the Real Cost of Owning Your Home

Need a Home Loan?

We know this may come as a shock, but that home that’s for sale for $350,000 will actually end up costing about $575,000 over time. How? Between the interest rates, insurance, property tax, and the PMI, things add up quickly when you’re a homeowner. This doesn’t even begin to cover the cost of maintenance, upgrades, and furnishing. Just do the research on the real cost of owning to know what you're getting into.

When Spending Equals Saving

Let’s break down how that cost of that home purchase to understand how to better save money during the purchase process. If you’re like most homebuyers, you’re probably looking to use a smaller down payment (3.5%-5%) and that’s your first mistake. You’re anxious to have your own space, but without putting a solid 20% down, you’ll be forced to not only take out a larger loan to cover the difference, which results in paying more in interest throughout the years, but you’ll also be required to take out private mortgage insurance (PMI), to protect the banks if you default on payments.

The Deal on Down Payments

That’s just a single aspect. The interest in this example was based on 4.125% interest rate, over 30 years. If you paid more than the required $2292 minimum per month, you’ll be able to slowly decrease the number of years on your loan, as well as the interest, which decreases the total overall cost. If you were to put a 20% down payment on that same house, your monthly payments would only be $1809 per month.

Calculate It

To understand more about the costs and breakdown of your mortgage, check out the many mortgage calculators available on the internet. Most of them will break down how much of the principal is paid each month, versus the amount paid towards interest.

Final Thoughts

Research as much as you can until you feel like you really understand what the real cost of owning is. Look for areas where you can save, and try to take advantage of programs to help with down payments. Then, before you invest, do the math. Enjoy your home buying journey!

Need a Home Loan?

Latest Posts

Loans, Fees, and the Real Cost of Owning Your Home via @homebidz

Loans, Fees, and the Real Cost of Owning Your Home

Need a Home Loan? We know this may come as a shock, but that home that’s for sale for $350,000 will actually end up costing about $575,000 over time. How? Between the interest rates, insurance, property tax, and...
Rent to Own vs. Traditional Mortgages via @homebidz

Rent to Own vs. Traditional Mortgages

Need an FHA Loan? It’s no secret that most people seek out rent-to-own home options over traditional mortgages because of credit issues: either their credit is fair or poor or simply just unestablished. Depending...
Why Does My Credit Matter? via @homebidz

Why Does My Credit Matter?

Click Here to Look at Bad Credit Home Loans Honestly, if you have less than perfect credit, you can still potentially buy under a rent to own option, but you still have to get financing at some point, so you'll need...
Taking the First Step on Your Rent to Own Journey via @homebidz

Taking the First Step on Your Rent to Own Journey

Looking for Rent to Own? When considering a rent to own journey, there certainly are a couple different choices. Each requires the rental property itself, two authorized documents, and then -- sometimes -- an...
Simple Ways to Save for Your Down Payment via @homebidz

Simple Ways to Save for Your Down Payment

Need Family Support? There are a lot of different ways to purchase a home. You can get creative and try owner-financing, or even buying a home at an auction. For the majority of us though, we’re still using banks and...
Should I Rent to Own or Lease? via @homebidz

Should I Rent to Own or Lease?

Check Out These Listings You've found yourself asking, "Should I rent to own?" or "Should I look into a lease option?" Understanding your options, and determining if a rent-to-own or lease option is the most...

Categories