Master mortgage basics for smarter home buying decisions

Cost Considerations

Understanding the costs associated with a mortgage is vital for budgeting and financial planning. In addition to the principal and interest, you'll need to account for property taxes, homeowner's insurance, and possibly private mortgage insurance (PMI) if your down payment is less than 20%. Closing costs, which typically range from 2% to 5% of the loan amount, cover fees for services such as appraisals, title searches, and legal work.