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- what can you afford?
The first step toward finding the right home is to quickly compute your purchasing power and determine how much you can afford to pay each month. This saves you time by allowing you to focus on homes in your price range. Use our online calculator to determine how much house you can potentially afford.1 In addition, it's important to consider both the upfront and ongoing costs associated with purchasing a home in the planning stage.
Upfront costs
Your upfront costs will typically include your down payment, the cost of the home inspection and your closing costs.
- Down payment Typically ranges from 3% to 30% of the cost of the house. The more you can put down, the greater equity you will have in your home and the lower your monthly payment will be. For down payments less than 20% you may also need to pay mortgage insurance.
- Home inspection May range from $200 to $900, depending on rates in your local area.
- Closing costs Typically range from 2% to 6% of the loan amount depending on your area. These costs include fees that you need to pay to state and local governments as well as costs associated with obtaining your mortgage such as any applicable fees for discount points.
Ongoing costs
Your ongoing housing costs may include some or all of the following expenses:
- Monthly mortgage payment
- Required homeowners insurance
- Mortgage insurance, if applicable
- Flood insurance, if applicable
- Property taxes
- Utilities
- Maintenance
Preapproval
Once you have determined your potential budget, it can be a good idea to get preapproved for a mortgage from a lender, such as Chase. Preapproval provides you with a firm home-shopping budget and allows you to shop with increased peace of mind, knowing that your financing is already in place.
Low down payments
Many lenders require a 20% down payment on your home in order to avoid mortgage insurance. However, it is possible to buy a home with less than 20% down. Go to our down payment strategies page to learn more.2
1. Results of the mortgage affordability estimate/prequalification are guidelines; the estimate is not an application for credit and results do not guarantee loan approval or denial.
2. For down payments less than 20% mortgage insurance (MI) is required and MI charges apply.
