I've shared my formula for buying a house which should help minimize mortgage costs. This piece from Smart Money adds to that with their six tips on saving on mortgage costs. Their tips:
- Polish Your Image
- Get the Right Loan
- Make a Down Payment of at Least 20%
- Consider Paying Points
- Pay Closing Costs Upfront
- Pay Close Attention to Fees
In particular, I like what this piece has to say about making a downpayment:
In this new era of interest-only loans, many home buyers are skipping this advice. But if you can swing it, this is still the way to go. Not only will this provide some equity in your home, but it's also a way to avoid private mortgage insurance, or PMI. Costs for PMI can be significant over time — about $40 a month per $100,000 of the loan, according to estimates by the Federal Trade Commission.
This is part of my formula I noted above and sound advice in my opinion. I've also written about the PMI issue and agree with Smart Money's thoughts.
Next to your career, your house is probably the biggest asset you have, so taking sound advice when buying (and selling) it is very important. (I know, that's an understatement.) Here are some more links on the topic that may help you out when it comes to getting the house you want:
Third one seems to have made sense in one sense of the word but then again why take risk?
Posted by: Kane | July 04, 2006 at 03:34 AM
FMF, I see spam comments like the above once in a while on your site...is this a bot program? Or are these people writing these random words for a reason? Why? Just thought you may know...it seems weird to me...
Posted by: Budgeting in the Fun Stuff | March 19, 2010 at 12:49 PM
Budgeting --
It's a spam bot that is left in hopes it will generate traffic/link juice to the leaver. I catch most of them, but I get many in a given day and sometimes miss a few.
Posted by: FMF | March 19, 2010 at 12:52 PM