Home Loan Qualification Calculator

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See also:

• rent or buy calculator
• home affordability calculator

 

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Home Mortgage Qualification Guidelines

Qualifying for a mortgage is one of the biggest steps that a person takes towards owning a home. There are various steps and questions to consider when purchasing a home such as how much you can afford, shopping for a loan, home buying programs and much more. This guide includes all of the information that you'll need to shop, compare and negotiate mortgages while also looking for homes that meet your qualifications and budget.

To Rent or Buy: That's the Question

Many individuals and families go through the same quandary, but what it boils down to is the location. Renting often makes more sense within a city, but it's also about the length of time you plan on staying in one place. The local market also plays a large role in whether you should rent or buy.

Do Research on Your Target Area

When deciding whether to rent or buy, you should first look into the details of the local market. There are certain parts of the country that have better housing markets for buyers such as Toledo, Cleveland and Detroit. You can also look at Zillow's Breakeven Horizon Index, which also looks at the average cost of down payment, purchase price and maintenance costs in different cities. This will give you a better figure as to what it would cost to live in a certain local market. The index will break it down for you in terms of years on a map of the United States. For instance, it would take a short amount of time for buying to become a better option if you wanted to live in Orlando-Kissimee in Florida, where the break even index is at 1.7 years.

Your Length of Stay

One factor really comes down to the length of time you want to live in one area. If you think that you'll live in a location longer than five years, it may be better to buy a home. However there are also housing markets which have made it easier to purchase a home and pay it off in less than three. In terms of investment, you have to decide if it's worth the cost to purchase a house.

Predicting Future Value and Rental Prices

This part requires more research into the housing market where you want to live. If you expect the price of rent to go up drastically, it may be a better time to buy a home, but only if your home will maintain or increase in value. If you can find a cheap investment that is worth the cost, then you may be able to increase its value if the housing market is on the rise.

Utility and Maintenance Costs

There are certain areas where it simply costs more to live based on energy prices. Homes may also have additional maintenance costs such as landscaping, homeowner's association fees, pool maintenance and much more. When you rent, your landlord typically takes care of maintenance costs, but you can still pay a lot in utility bills. On the other hand, you can upgrade your home, remodel, paint, hang pictures and own as many pets as you want to in your own home.

Upfront Costs and Monthly Payments

Renting is much cheaper in terms of upfront costs. Usually you have to pay a security deposit, first month's and last month's rent. With buying a home, you have to come up with a sizable down payment to qualify for a mortgage in most cases. There are other costs as well when purchasing a home such as loan setup fees, property inspections, escrow or title company fees, homeowner's insurance and other costs that may be tacked on. You have to decide if it's worth the investment over time.

Price-to-Rent and Debt-to-Income

These are two terms to remember when deciding whether a home is a good purchase or not. Both price-to-rent and debt-to-income ratios concern purchase price vs. income and rent vs. purchase price. Price-to-rent evaluates mortgage principal and interest, property taxes, insurance, closing costs, HOA dues if appropriate and mortgage insurance if applicable. In addition, tax advantages, rent payments and renter's insurance are also considered as the total cost of renting.

Price-to-Rent

To use the price-to-rent ratio, you need to have the average list price with the average yearly rent for homes in that area. Then you calculate the price-to-rent ratio by dividing the average list price by the average yearly rent price or as follows:

• Average List Price / (Average Monthly Rent x 12) = Price-to-Rent Ratio; or
• $160,000 / ($1,050 x 12) = 12.6

Any time you get a price-to-rent number that is less than 15, you should buy. In the example above, this is a home that would be worth purchasing. Any time it is over 15, it's better to rent.

Debt-to-Income

The other ratio to remember is debt-to-income. This measures the total housing cost plus other debt against your income to determine if you can actually afford a home. All lenders use the debt-to-income ratio to qualify you for a loan. It's also used by some rental managers to understand if you can afford the monthly costs. To calculate this number, you divide debt by income to get a percentage. While this doesn't seem complex, it depends on how much debt and income that you have.

Debt covers monthly housing and non-housing debt payments, which includes mortgage payments, property taxes, homeowners insurance, mortgage insurance, student loans, car loans, credit cards, child support and other factors. While not all of these will be present on your credit report, it's important to understand how to calculate this percentage for your home buying purposes. Lenders are much more restrictive in the percentages that they use to determine what interest and principal you qualify for--if at all.

Using an example, you can understand how this ratio works for determining whether to buy a home.

A family wants to buy a small home in San Diego for $500,000 with a sizable down payment of 25% ($125,000) to get a $375,000 loan.

Calculate Debt-to-Income Ratio

• Total monthly housing costs: $2,415 ($1,736 mortgage, $100 insurance, $579 taxes)
• Total non-housing debt: $100 (credit card)
• Monthly income: $9,000
• Debt-to-income ratio = ($2,415 + $100) / $9,000 = 27.9%

This is an excellent position to be in for buying this home. The ratio is quite low that they can afford the home.

Using Price-to-Rent and Debt-to-Income

You can simply look up the rent values for the area to determine whether it's worth it to buy or rent a home. Using the above example of the San Diego home, there are parts of San Diego where the rent is as low as $1,000 a month for a single family home and as high as $15,000 per month.

Another thing to consider is housing tax deductions. A home may be cheaper after you calculate the annual mortgage interest and property tax paid by an average tax bracket of 30 percent. You'll get the yearly tax savings, which you can then divide by 12 and subtract from monthly housing costs to see if it's lower than monthly rent.

Whenever a monthly housing cost to buy is lower than rent, you should purchase a home as it will save you money, and homes can also increase in value. However all of this is also dependent on the local housing market.

Understanding Local Market Conditions

When you listen to the news make a comment about housing markets being up, that may have nothing to do with your local housing market. Everything is local when it comes to real estate markets. National numbers typically don't matter for your region. There are ways to better understand a local housing market and decide if it's worth buying a home.

Understanding a local housing market is more about looking at the way property values increase or decrease. Areas with a lot of commercial property nearby or smaller lot sizes are not going to be in the best housing market. There should complete residential areas where commercial properties don't exist. If you look at the property sizes, where do homes with the largest lot sizes reside? Best of all, you have to talk to local people if you are new to an area. They will be able to tell you the better neighborhoods to pick. There are also some amazing free tools online to help you look at local housing markets.

For example, Zillow has an automated home model that allows users to evaluate the value of different properties in a local area. You can get detailed market information including home valuation and recent sales. You can separate values by town, community, neighborhood, subdivision or zip code.

You can also use Trulia for its "hot market" or heat maps, which are a great source of graphic presentation of housing markets.

With Google maps, you can look at certain neighborhoods, find the larger property sizes and choose residential areas that are in more pristine areas.

Of course you can always hire a real estate agent to help you find the better housing markets and offer the best view of the local area.

Guide to Financial Preparation

With any home mortgage, you have to understand the costs to owning a home. Preparing yourself financially means that you meet the criteria above for a good debt-to-income percentage and you can make an upfront down payment. There are some programs that will help provide a chunk of a down payment, but it won't pay the full amount necessary. These are some things to consider when preparing yourself to purchase a home.

Saving for Down Payment

One of the key things that you have to do is save up for a sizable down payment. The down payment typically has to be worth between 20 and 25 percent of the home price. If you don't have the best credit, the down payment may have to be more. There are ways to get a lower down payment or even pay nothing upfront, but these methods typically cost more in the long run because they include piggyback loans and private mortgage insurance that have higher interest rates. There are also closing costs which add up to 6 percent of the total purchase price in some cases. You also have to include property taxes, remodeling work, moving expenses and decorating costs. To

Check Credit Score and Report

Your credit history and FICA credit score will play a large role in determining your down payment, interest rate and mortgage loan terms. You should check your credit score a year a few months in advance to looking for a home. Credit scores should be above 700 if you want to get the better interest rates. You also should add up all of your debt on your credit report. If you have a higher debt-to-income ratio, you won't be a quality buyer for a lender.

Reliable Source of Income

In addition to the above, you need to have a reliable source of provable income to purchase a home. If you own your business, you may need to prove its reliability. If you've only been at a job for six months, you may need employment verification. Lenders really want to make sure that you'll be able to pay the monthly housing costs and that you won't be stuck with a monthly housing payment you can't afford because you lost your job.

If you don't have a reliable source of income, it's essential that you start looking for something that will make triple or quadruple the amount of your monthly housing costs. For instance, if the typical mortgage costs are $2,000 a month, then you have to be making between $6,000 and $8,000 a month at minimum.

Emergency Savings Fund

In addition to the down payment, you should have at least six months of cash on hand to cover living expenses and monthly housing costs. This means that you can cover your monthly mortgage, property taxes, debts, food, transportation and insurance for 6 month. Using the above example, you should have $18,000 to $23,000 in your emergency savings fund before buying a home.

Pay Off Your Debts

It's important to pay down your debt before getting into a home, and typically you need to have paid off your debts at the minimum of six months to a year before you start looking for a home. Lenders want to see impeccable credit history, but they will accept credit scores and credit histories that are less than perfect if you make payments on time and your entire debt is low compared to your income. In addition, paying down your debt or becoming current on your payments will lift your credit score up over time.

Budget Your Monthly Home and Maintenance Costs

If you decide to buy a home, you'll need to cover home and maintenance costs in addition to living expenses. Your home may require some repairs or remodeling before it's ready for move in. You may also want to purchase new furniture or look into landscaping and pool maintenance services. You should also check the typical utility costs for the area and see how much other services will cost such as Internet, cable and phone. When you have fully budgeted your monthly costs and it's still well within your means, that means you're financially prepared and ready to buy a home.

Incentives for Buying

There are a lot of incentives for buying a home including asset appreciation, tax incentives and equity. When you have a lot of different reasons for purchasing a home, it may be the best time to get into a new property, but you also have to consider your financial situation. These are just a few incentives for buying a new home.

Asset Appreciation

Over time, the value of your property may increase. You can also remodel and upgrade your property so that it has a higher value over time. This really depends on the housing market. If you purchase a home at an affordable price is a rising housing market, you'll likely be able to get a sizable return on your investment and even negotiate lower interest rates in the future.

Mortgage Interest Deductions

If your mortgage balance is less than the price of your home, you can deduct mortgage interest on your tax return. The interest is the largest part of a mortgage payment. In other cases, you can add homeowners association fees and property taxes as part of your deductions.

Property Tax Deductions

Real estate property taxes paid for a first home or vacation home are also deductible on your income taxes. However there are some states with limitations. For example, California's Prop 12 limits property tax increases to 2 percent per year or a rate of inflation if it is less than 2 percent.

Capital Gain Exclusion

If you have lived in your house for two out of five years consecutively, you can also exclude up to $250,000 for an individual or up to $500,000 if married per couple of profit for capital gains.

Preferential Tax Treatment

If you receive get a higher return on investment when you sell your home than the allowed exclusion, it will be considered a capital asset if you owned the home for more than a year.

Equity Incentives

Owning a home also allows you to build equity over time. You can fund your home improvements or pay off other high interest debts like credit cards, medical bills and student loans.

Risks of Purchasing a Home

As the previous housing market crash showed, there are some risks as well as rewards to owning a home. While homes can increase in value, they can also plunge. After the crash in 2010, 11 million homeowners were feeling the pain of owing more than their properties were worth according to Forbes. However home prices have dropped considerably in certain housing markets, and there are areas where it makes sense to own rather than rent. When it comes to assessing a risk, the price-to-rent and debt-to-income ratios play a huge role.

There are a variety of factors that show owning a home in this market isn't as risky as it once was. There have been several housing market recessions over the years, and it's still one of the more solid investments that has the potential for a big return. However you have to be able to not take on an excessive amount of debt in order to afford a home. These are few of the risks that buyers face when getting into a new home.

Housing Market Stability

Housing markets are always rising and falling. When homeowners purchased homes at the peak of the housing market only to find themselves at the bottom a few years later, it seemed like a major kick in the teeth. These homeowners took on an excessive amount of debt in order to purchase their homes. When you place that kind of risk on an investment, there are a lot of factors that can cause problems.

That's why it's important to always consider your debt, income and financial preparation before buying a home. You should also do considerable research on several housing markets even if some of the housing markets aren't where you wanted to live in the first place. You may find that there are equally rewarding areas to live with lower purchase prices and stable housing markets that will provide a better investment.

Why House Inspections are Crucial

Risks for owning a home aren't just based on the housing market. You may think a home looks great on the surface, but there could be a lot of problems. When you get a home inspection, it should give you a better idea of what's going on with the house. There could be internal problems, leaks, structure instability or radon gas poisoning, which is invisible and usually only appears on housing inspection reports. In addition, home inspections are necessary for mortgage and insurance purposes.

When you get the housing inspection, there are a few things to look out for. If a home has radon gas, it will need proofing and protection, which costs about $10,000 on average. In addition, if improvements were made to the home, you must check if permits were pulled in order to make these changes. Homeowners often go through several do-it-yourself projects and don't pay the fees for permits in order to get their work inspected. If electrical, piping or major reconstruction of the house has been performed, you'll want to see those permits as well.

"As Is" Properties

There's some confusion as to whether this is a good term for a low purchase price home with a lot of rewards or if it spells trouble. Oftentimes there will be homes being sold "as is," which means that there could be a lot of repairs or clean out involved. It most likely means that a homeowner won't be providing any upgrades, changes, repairs or credits for any issues with the property. Mostly this means that the seller could be a little difficult to work with, but if the purchase price is low and the home inspection doesn't reveal major problems, you may be able to take advantage of a lower purchase price for a higher return.

Unpaid Real Estate Taxes

There are a lot of properties out there that are being sold because the local government wasn't able to collect property taxes from homeowners. In this case, the home is auctioned off publicly. When a person wins the auction, they become the new owner of the land and property deed, which doesn't have any mortgages or liens. However the purchasing process takes a much longer time when buying these homes. You also can't examine the property before winning an auction. While you can sometimes walk around the property and guess what it looks like on the inside, there isn't a way of knowing how well it's been maintained. This means that home improvement costs can exceed the actual value of the property, and while you may win an auction, you might not be able to move in right away. In some cases, it takes over a year. Title companies don't always want to give title insurance until they know that all liens are cleared, which takes up to 12 months.

Investment Property Risks

If you are purchasing a home as an investment property that will become a home for renters, you also have to consider how much the upkeep and maintenance will cost. You may have to make considerable repairs after tenants leave. There is a bigger chance that property will be damaged. There may also be legal costs. If you don't get a tenant right away, you could also have a loss of income. If a property is in a declining property market, your rental price may also suffer. Maintenance and landlord duties may also become a considerable drain on your time and resources.

Wasting Your Time

The home buying process doesn't take a day or a week. It usually takes months to find the right property that meets all of the criteria, passes inspections and gets approved for a mortgage with the right lender. When you don't have all of your finances in line, you may just be wasting your time. In addition, if you choose to go with a real estate agent that doesn't show you the right properties or doesn't fully understand your financial situation, it could be even more of a disaster. It's important to come up with a plan before purchase a home so that you understand all of the risks and don't waste your time looking for a home that you can't purchase.

Ways to Overcome Risks

Whether you are purchasing a new home for yourself, a family or as an investment property, it's important to consider the risks and warning signs before getting into a home. Financial risks are just part of the issue. There are also liabilities and a lack of mobility. If you want to overcome these risks, you have to consider all the factors and come up with an intelligent plan. When you've considered all of the risks and come up with a solution, then you'll be able to more efficiently find the best property.

Home Buying Outline

You should create a list of different personal and financial risks for buying a home. For each risk, you should come up with a viable solution. For example if you have a great job but your local housing market isn't the best, then it's a risk to buy in this housing market for you. It may be possible to get transferred or look outside of your local housing market for a more appropriate area. Your outline should cover personal risks, financial risks and property valuation risks. Some solutions are listed as follows:

• Risk: High Amount of Debt - Look for properties with lower purchase prices and assess if the risk is worth the reward. If the housing market has been stable over the past 10 years, and the home is located in a perfect area, it may be worth a higher amount of debt if your budget can afford the expense.
• Risk: House Inspection Failed - A house inspection is the first step to overcoming the major risk of buying an overvalued property. Evaluate the cost of upgrades and upkeep for the home. Are the problems minor or major? For example, is there radon gas? Are the pipes leaking? Are their structural problems? Perhaps the home needs a few replacements, but if it has a good foundation and the seller is willing to work with you, then the home may actually increase in value.
• Risk: Monthly Housing Expenses Increase - If the housing market does dip or crash, you may end up paying more than the house is worth. In addition, living costs may also go up in the area where you purchased a home. There are also tax credits that can offset the monthly payments for your home. The key here is to look at the housing market and also assess the living area where the property is located.
• Risk: Selling Your Home in the Future - You may decide that you don't want to live in an area anymore or you get a job transfer, in which case you'll need to sell your home. If that day comes, you may find that it's a difficult process, and you also may lose money on your investment. That's why people have to be sure that they are purchasing a home at the right time.
• Risk: Natural Disaster - Nothing is worse than losing a home to a natural disaster. Home insurance covers most of the natural disasters that can affect your home, so it's important to cover this risk as soon as you purchase a new home.
• Risk: Negative Tenant Behavior - If you purchase a property as an investment, you may open the door to a whole new set of risks. However you can hire a property management firm to handle the necessary expenses and upkeep of the property. You can also vet your prospective tenants very closely to determine their financial situation and prior rental history.
• Risk: Loss of Income - Job security goes hand in hand with buying a home. If you know that you love your job, your job loves you and you don't see any transfers or departments closing down in the near future, then you're probably safe. However if you feel any kind of inkling that you may not have a job in a year or two, it's best to hold off in investing in a property until you know that you can afford it.
• Risk: Financial Overextension - If you already have a ton of debt, you may have to wait a few years and pay down your debts before getting into a property. If you budget properly and still find that you're not able to meet triple or quadruple the mortgage payment in a month with debt and living cost payments, then it's likely not a good time to buy.

If you plan for all the risks and are able to find solutions or mitigate the risks with reasonable logic, then owning a home may still be in the cards. In addition you should consider that there are home buying programs to help home buyers. These can help you with down payments and overall house payments.

Government Home Buying Programs and Down Payments

There are all kinds of home buying programs and incentives that the government offers. Most of these home buying programs are local to your state. There are also local agencies that assist people who help buying a home for the first time including help with a down payment. There are a few resources to help you make sense of each program.

Local Home Buying Programs

Every state has a variety of its own programs for home buyers. You can find a list of states at HUD.gov. This list details all programs for each state. There will be several programs in state and local governments to help you, but there are also organizations.

Federal Housing Administration (FHA) Mortgage Loans

These are mortgages overseen by the US Department of Housing and Urban Development. They are government-insured loans that have very low down payments, which can often be borrowed. These loans come with lower interest rates, and the qualification process isn't as difficult as with a bank or private lender because credit isn't a major factor. HUD homes can also be assumed or taken over. However, a cap has been placed on how much can be borrowed. Appraisal guidelines are also more strict. For example the house has to be worth the selling price. FHA mortgages are also not limited to first time borrowers.

Related Question: What are "HUD homes, and are they worth the trouble?

HUD stands for the US Department of Housing and Urban Development. There are a number of HUD homes on the HUD Home Store, which are REO or real estate owned properties. these are typically smaller, single family homes that were acquired through foreclosure on FHA mortgages. Registered real estate brokers and other organizations are able to bid on properties on behalf of clients who want to buy a HUD property. however anyone can buy a HUD home if they have cash or qualify for a loan. However you can't purchase a HUD home to become an investment property. There are risks to purchasing these properties, so it's essential that you get a house inspection.

US Department of Veterans Affairs Home Loan Guaranty Service

VA mortgages are guaranteed loans by the government that are only available to veterans, active duty service men and women or those who are in the reserve. Widows and widowers also qualify for guaranteed home loans. VA loans also have guidelines that allow people to qualify for loans when they otherwise would not with a private lender. In some cases, you don't even have to make a down payment with a VA loan. While there are some limits on the amount of the loan, you typically find that VA-guaranteed home loans are large enough to purchase competitively priced homes all over the country. The guaranty in this situation is that the VA will protect the lender in case there is a loss if the veteran or owner fails to pay off the loan.

US Department of Agriculture Rural Development Housing and Community Facilities Program

If you have a very low income in a rural area, you may qualify for this type of loan. If you are a farmer or you have lived in a rural area for some time, you can ask mortgage lenders if you quality. The Rural Housing Service (RHS) offers a variety of homeownership opportunities to those who live in rural parts of the country. There are also programs for home renovations and repair if you qualify for this loan. Direct loan and grant income have limits that can be found in your state.

Reverse Mortgages or Home Equity Conversion Mortgages

These were designed for older borrowers who have substantial equity in their homes. They can increase the monthly income if retired or elderly. You can use the equity in your home without selling or moving. The owner receives a payment each month that slowly reduces the equity. If you decide to move or sell, then you have to repay the loan. You also have to pay the loan if you die.

American Dream Downpayment Assistance Initiative

This program offers $200 million annually around the country for downpayment assistance. To be eligible for ADDI, you have to be a first-time buyer that wants a single family home. You must be an individual and a spouse who have never owned a home during the three-year period prior to the purchase of a home with ADDI. You can purchase 1 to 4 unit family homes, which can be single family houses, condominiums or town homes. All states are eligible to receive this financial help.

Zero Downpayment Act

Zero Downpayment Act makes it so that you don't have to pay a down payment if you are an individual or family who bought a home with FHA-insured mortgages. This program offers more opportunities to first time home buyers who do not have enough savings for a sizable down payment. This is a different program than American Dream Downpayment Act, which gives you money to afford a home's down payment. FHA will charge a higher insurance premium to lenders with zero down loans.

Energy Efficient Mortgage Program

FHA's Energy Efficient Mortgage program allows homeowners to save money on their utility bills by offering assistance to add energy efficiency features to new or older homes as part of an FHA-insured home. EEM programs provide mortgage insurance for a person to purchase or refinance a home and include the price of energy efficient improvements. The funding comes from a lender such as a bank, company or savings and loan business, but the mortgage is still insured by HUD.

Teacher Next Door Program

HUD created this assistance for teachers to buy homes in low to moderate income areas. The program is specifically for teachers who work full time in public schools private schools, but they can also work in federal, state, county or city educational agencies. The teacher has be certified by the state and teach in a classroom, or you can be an administrator in grades K thru 12. You also have to be in good standing with your employer in order to qualify, which means that the employer must certify that you work full time as a teacher or administrator. With this program, you don't have to be a first-time home buyer, but you can't own any other home at the time you close on your new property. You also have to live in the new HUD property for three years.

Finding Local Government Programs

There are special programs administered by state and local housing finance administrations. You can call the local government housing office or go to HUD.gov and search for programs in your state. Every community has a variety of assistance for first-time home buyers and down payment assistance.

Non-Profit Programs for Housing

There are a number of non-profit organizations that work with HUD in order to help people afford a new home. You can use the non-profit search on HUD.gov in order to find a list of organizations in your area that can help. Most of these organizations are listed by state. They provide financial assistance, guidance and even real estate agent services.

Habitat for Humanity Programs

The non-profit organization Habitat for Humanity is well known for being a nondenominational Christian housing organization that places low income people in quality homes. There are usually three similarities to properties allowed for Habitat for Humanities.

• Houses are sold at a no profit with no interest charged on the mortgage.
• Home buyers and volunteers build the house while under professional supervision.
• Corporations, small businesses, individuals and faith groups come together to provide support.

Home buyers are typically chosen by their need and ability to repay the no-profit, no-interest mortgage. They may also have to volunteer or work with Habitat for Humanity. The average cost for these homes is $50,000 to $70,000. Mortgage lengths also may be as little as 7 years but go up to 30 years.

Make an Offer

Once you have considered all of the possible risks, evaluated your income, planned a budget and looked at the housing market where you want to live, you should have a good idea whether you can make an offer or not. You need the capacity to make current and future payments, which comes down to health, income and job security. You also need capital to afford a down payment, initial moving costs and savings. If you have a lot of debts, you may want to pay these down before trying to purchase a home.

Before you make an offer, you can go to a lender and talk about pre-approval to see what amount you are working with. To get a pre-approval, you'll need to know what's in your credit report and prove that you can make a sizable down payment, or you need to be approved for a HUD loan. Once you are ready to make an offer, you'll sign a purchase agreement, and the lender will have the home appraised for its market value. A commitment letter will detail the terms of your home approval if the home is inspected and appraised as valuable by your lender.

Owning a home is a great responsible. Once you understand all of the risks and adequately prepare, you're at a better advantage over other buyers who are going in blind. Mortgage loans are great resources for people who want to get into a home in a rising housing market. Before you purchase, consider all of the risks and outline a plan that looks at your finances, government programs, possible rewards and income requirements.

Key Tips & Advice

Things to consider when buying a home:

• While the 30-year mortgage is the most popular term in the United States, a 15-year term builds equity much quicker;
• Home buyers in the US move on average of once every 5 to 7 years;
• Early mortgage payments apply primarily to interest rather than the principal;
• Using a shorter loan term, paying extra & making bi-weekly payments can better help offset any transaction-based expenses.

Do Home Prices Always Go Up?