Many buyers get overly focused on the price of their targeted new home and end up haggling over what turns out to be just a drop in the bucket. Not to discount purchase price, but in terms of money, here are other factors that can be more important:
Your Interest Rate. This can have a huge effect on your finances. For example, an extra quarter of a percentage point on your interest rate—assuming a $250,000 30-year loan at 4.0 percent vs. 3.75 percent with a 20 percent down payment—would mean tacking on $10,296 to the life of your loan. A lower purchase price is nice, but your interest rate is where you can really save money.
Your Down Payment. How big of a down payment you make is something you’ll need to seriously consider. Having a low down payment is ideal for many buyers, but you should keep in mind that the more you put down up front, the more you’ll save in the long run. On the flip side, making a large down payment may put a strain on your current finances, so you may be better off making a smaller down payment.
If You'll Need Mortgage Insurance. Along with your down payment options, you’ll need to think about mortgage insurance requirements. If you put less than 20 percent down on many types of mortgages, you may need to pay mortgage insurance each month. The amount you’ll pay will vary based on several loan-specific factors and the loan-to-value ratio, but it could end up being a bit expensive.
The Age and Condition of Your Home. If you’re buying an older home—or a home that may need some repairs or remodeling—your maintenance expenses going forward may be substantial. Even if you’re buying an older home that’s currently in great shape, the age of your appliances, cooling and heating systems, roof, etc. could be a big monetary factor down the road.
For more than 25 years, Omega Financial has been serving mortgage clients in Massachusetts. Our brokers have approximately 50 years in the mortgage business. You always will receive fast, courteous, and accurate information. Omega Financial, Inc. is a company duly licensed to operate in Massachusetts as a Mortgage Brokerage. We are located in the Town of Norwood, Massachusetts where we have been operating as Omega Financial Incorporated since 1988.
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