If you’re hesitant to enter this crazy seller’s market and not sure what you can afford to buy, there’s good news. Mortgage rates are at historic lows and more and more homes are hitting the market.

Rather than letting the high price tags of homes discourage you, we recommend connecting with a lender to determine what your monthly mortgage would be. Since you live with the payment (not the price of your home) you may be surprised to find that today’s low mortgage rates make homeownership much more affordable.

Below are some of the most common mortgage scenarios to help you get an idea of what a monthly payment will look like based on the duration of the loan and a 20% down payment.

CONVENTIONAL 30-YEAR FIXED MORTGAGE

Even at the highest interest rate in our example, a $300,000 home translates to about a $1,100 monthly payment. The only thing to keep in mind, however, is that if you are putting down less than 20%, you will be required to pay Private Mortgage Insurance (PMI) in most cases. This is a fee (0.55% to 2.25% of the total loan) lenders tack on to protect themselves from default, and it can be divided up and added to your monthly payment.

CONVENTIONAL 15-YEAR FIXED MORTGAGE 

If you have the budget to expedite owning your home (i.e. no more mortgage payments), a 15-year fixed loan may be a good option for you. The main advantage of a 15-year mortgage is all the money you'll save on interest since you're paying on it for only half as long as a 30-year mortgage. Here’s what typical monthly payments look like on a 15-year fixed with 20% down.

Wondering what your mortgage options look like? Let our team connect you with one of our excellent lenders who can help you navigate the current mortgage rates. Give us a call!