When you buy a home, your base payment responsibilities are (1) Mortgage payment, (2) Property Taxes, and (3) Homeowners Insurance. You may see some mortgage professionals refer to this as PITI (Principal Interest Taxes Insurance). However, your payment responsibilities may also be a little different depending on how much you put down, what type of loan you have, and the property type. Here are some added responsibilities depending on these factors:
If you put down less than 20%, OR if you are securing an FHA (government-insured loan) with any down payment amount:
** You will also be responsible for paying Mortgage Insurance
If you buy a condo or townhouse:
** in lieu of homeowners insurance, you will be responsible for HOA dues and HO-6 (“walls-in”/interior) insurance
Also, if you purchase a home that is in a designated flood zone, then flood insurance is required.
I always recommend doing a preliminary review of your qualifying numbers, not just to see what a lender may qualify you for, but what you would feel comfortable paying. I find that with most people (not all), a lender will qualify them for more than this realistic comfort level, although it’s important to also review what your tax deductions may be. There’s a lot that goes into the details – let me know how I can help.