Purchasing a home stands as perhaps the most significant investment you’ll ever make. Before embarking on this journey, it’s crucial to strategize how you’ll finance this substantial expense. Establishing a budget—and adhering to it—prior to touring potential properties is essential.

A mortgage payment comprises four fundamental components, collectively known as PITI (pronounced “pity”): principal, interest, taxes, and insurance. While many prospective homeowners are aware of these expenses, they often overlook additional costs associated with homeownership. These can include homeowners association (HOA) fees, private mortgage insurance, routine maintenance, heightened utility bills, and significant repairs.

Our Mortgage Loan Calculator is a valuable tool for factoring in PITI and HOA fees, shedding light on the financial commitments involved in homeownership. However, it’s essential to recognize that other expenses aren’t factored into this calculation. We strongly advise maintaining a prudent buffer between your monthly payments and your average income.

Your specific interest rate hinges on various factors, notably your overall credit profile and debt-toincome ratio (DTI). This ratio is calculated by summing up all your debts and new mortgage payments, then dividing the total by your gross monthly income. It’s wise to keep these considerations in mind as you navigate the homebuying process.