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Home Buying Guides

Everything you need to know about buying a home, from calculating affordability to understanding PMI and closing costs.

9 guides available

Understanding the Home Buying Process

How Much Can You Afford?

Lenders typically use the 28/36 rule: no more than 28% of gross income on housing costs and no more than 36% on total debt. Our guides help you calculate these limits for your specific situation.

Down Payment Options

Down payments range from 0% for VA loans to 3.5% for FHA and 5-20% for conventional. A larger down payment means lower monthly payments and can help you avoid PMI.

Understanding Your Mortgage Payment

Your monthly payment includes principal, interest, taxes, and insurance (PITI). Understanding each component helps you budget accurately and compare loan offers effectively.

Comparing Loan Types

Conventional, FHA, VA, and USDA loans each have different requirements and benefits. Choosing the right loan type depends on your credit score, down payment, and financial goals.

Frequently Asked Questions

How much house can I afford on my salary?

A common guideline is that you can afford a home priced at 3 to 4.5 times your annual gross income, depending on your debts and down payment. Use the affordability guide to calculate your specific budget based on the 28/36 rule.

What is PMI and how can I avoid it?

Private mortgage insurance (PMI) is required when your down payment is less than 20% on a conventional loan. It typically costs 0.5% to 1.5% of the loan amount annually. You can avoid it by putting 20% down, using a VA loan, or choosing a lender-paid PMI option.

Should I rent or buy a home?

The decision depends on factors like how long you plan to stay, local rent vs. mortgage costs, your savings, and your financial goals. Generally, buying makes more financial sense if you plan to stay at least 5-7 years. Our rent vs buy guide covers all the factors to consider.