Follow these three simple rules (and one suggestion) when buying a home, and your future self will thank you.
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daveramsey

2024-04-09 09:53:33

there's a couple of rules we use rule number one is to be debt-free which you are rule number two is when you make your downpayment you need to retain enough to call your emergency fund which is three to six months
of household expenses the third thing is never take out more than a fifteen year fixed rate where the payment is more than a fourth of your take-home pay that's the max you can qualify for almost twice that much but that doesn't mean you need to be that stupid don't do that keep it conservative so you can get the house paid off
in less than fifteen years that's the goal then the last thing is if you can figure it out make a downpayment of twenty percent or more with a conventional fannie mae loan
you avoid pm i private mortgage insurance p m i cost you about seventy five dollars a month per hundred thousand borrowed so we're talking about two hundred twenty five dollars a month on three hundred k that's pretty substantial
and all that is is for closure insurance that you buy for the mortgage company if they have to foreclose on you it covers them it does nothing for you but if you put down twenty percent you have an eighty percent loan-to-value ratio then you avoid having to buy that ridiculous p m i