Interest Rates Don’t Matter.
Obviously, interest rates matter. It’s the number one question our Madison-area mortgage experts get asked every day. “What’s your interest rate today?” But rates aren’t the most important piece of the Wisconsin home financing puzzle. Several factors come into play when you're looking to buy or refinance a home. Let’s take a look at what matters most.
Your Monthly Payment
This is the most important question you should ask your mortgage professional. “What will my monthly payment be?” Then ask yourself: Can I afford it? Even if I can afford it, do I want to pay this much every month?
Your monthly payment depends in part on the interest rate, but several other factors also affect it.
Your loan amount. How expensive is the house you plan to purchase? How much do you plan to put down? You can offset a more expensive home by increasing your down payment amount.
Your loan term. Do you want to have a standard 30-year term? Do you want to try to pay your home off in 15 years or 20 years? The longer the term, the smaller the monthly payment.
Your property taxes. Whether you escrow your taxes or not, they still affect your housing budget. You can find lower property taxes outside of Dane or Milwaukee counties.
Your homeowners insurance. A necessary cost for protecting your investment. You can compare quotes, bundle policies, and reduce risk factors to save money.
Potential mortgage insurance. Whether you need to pay mortgage insurance depends on your loan type and how much you put down. You can avoid this expense by putting down at least 20% or using specialty loan programs.
Your Closing Costs
This is the second most important question for your mortgage provider. “How much will I need to bring to closing?” Then ask yourself: How much am I willing to spend now to reduce my monthly payment?
Your closing costs vary based on multiple factors.
Your down payment. Some specialty programs, like VA and USDA, allow qualified borrowers to put down as little as $0. Other programs allow as little as 3%, but 5% is more common.
Your closing costs. These are the administrative and third-party fees related to the transaction. This includes real estate, lender, and title fees as well as prepaid taxes and insurance.
Potential seller credits. You may be able to reduce your closing costs through seller credits. This is when the seller agrees to pay some or all of the closing costs. The seller cannot contribute to the down payment.
Potential lender credits. You may also reduce your closing costs through lender credits. The lender may offer an option that covers some or all of your closing costs.
Potential down payment assistance. Certain homebuyers qualify for down payment assistance. These programs help make housing more affordable for first-time homebuyers. Programs often have income restrictions.
Your Mortgage, Your Way
Stampfli Mortgage is an independent mortgage broker with access to numerous loan options. We offer strategies to make homeownership more affordable. We believe every story is unique. Home financing isn't one-size-fits-all.
Whether you’re buying a new home, a second home, or an investment property, ask the right questions of the right people. Our Mortgage Advisors have decades of experience helping Wisconsin homeowners save time and money. Our free, no-hassle loan consultations provide expert advice. Call, text, or email today for more info.