Getting a loan has several costs associated with it. There are up front costs, like paying for an appraisal. There are closing costs, like bank fees, origination points, and third party necessities like title and escrow. Finally there is the long term expense of getting a mortgage…… interest.
Find a home on the market, zillow, realtor.com, wherever. Come up with a hypothetical buyer. List their down payment, loan amount and interest rate. Research typical loan fees (you can find mortgage calculators and closing cost estimators online) and list all the estimated fees involved with a new mortgage. Also calculate how much interest will be paid over the full 30 year span of the new mortgage. Between up front costs, interest, mortgage insurance and closing costs, you can calculate “What’s this going to cost me?”
Write out what the true cost of a mortgage is following the above scenario.
