[{"data":1,"prerenderedAt":1030},["ShallowReactive",2],{"site-navigation":3,"global-floating-disclosure":82,"jd-power-global":90,"WytoXIv5WB":100,"7DrVmR8m9r":141,"9WzxnT7Njy":157,"jwmSkwuXNb":168,"RYJmCySgUZ":182,"w6VeR8IREg":205,"0fqN5aOXyu":225,"Rk4P7j22f0":245,"XUnYH5gLYr":258,"oaKP11A90M":278,"Jg4Qgt4NAx":298,"VZhOYIU5t2":309,"uMgXOiLAAR":329,"UrRYQQzHct":349,"L8WhfObCtB":369,"Vw0lEbnNvj":380,"U3155RynEB":390,"e39XklTYXt":401,"disclosure-default":422,"spanish-language-disclosure":428,"J1MihCHS9H":435,"SEeE09FmpH":451,"related-articles-/home-buying/articles/how-to-buy-a-home/":479},{"_path":4,"_dir":5,"_draft":6,"_partial":6,"_locale":7,"bottomSiteNavigationLinks":8,"mainSiteNavigationLinks":28,"footerSiteNavigationLinks":34,"socialLinks":53,"headerNavigation":64,"_id":77,"_type":78,"title":79,"_source":80,"_file":81,"_extension":78},"/settings/site-navigation","settings",false,"",[9,12,15,18,21,24],{"text":10,"to":11},"Calculators","/calculators",{"text":13,"to":14},"Rates","/rates",{"text":16,"to":17},"Buy","/home-buying",{"text":19,"to":20},"Refinance","/refinancing",{"hideFromSiteMap":6,"text":22,"to":23},"Equity","/equity",{"text":25,"to":26,"hideFromSiteMap":27},"Education & Tools","/education-and-tools",true,[29,30,31,32,33],{"text":10,"to":11},{"text":13,"to":14},{"text":16,"to":17},{"text":19,"to":20},{"text":22,"to":23},[35,38,41,44,47,50],{"text":36,"to":37},"Citi.com","https://www.citi.com",{"text":39,"to":40},"Sitemap","/sitemap",{"text":42,"to":43},"Accessibility","https://online.citi.com/US/JRS/portal/template.do?ID=Accessibility",{"text":45,"to":46},"Privacy Policy","https://online.citi.com/US/JRS/portal/template.do?ID=Privacy",{"text":48,"to":49},"Terms & Conditions","https://online.citi.com/US/nga/termsdisclaimer/termsdisclaimerhome",{"text":51,"to":52},"Do Not Sell or Share My Personal Information","https://online.citi.com/US/ag/dataprivacyhub/cpra/home",[54,57,61],{"to":55,"text":56,"icon":56},"https://www.facebook.com/citibank","Facebook",{"to":58,"text":59,"icon":60},"https://x.com/Citibank","X, formally known as Twitter","X",{"to":62,"text":63,"icon":63},"https://www.youtube.com/citi","YouTube",{"utilityNavigation":65},[66,72],{"link":67,"variant":70,"icon":71},{"text":68,"to":69},"Apply now","#dragonflyapp","primary",null,{"link":73,"variant":76},{"text":74,"to":75},"{{tracking_code}}","tel:{{tracking_code}}","primary-outline","content:settings:site-navigation.json","json","Site Navigation","content","settings/site-navigation.json",{"_path":83,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":85,"content":86,"_id":87,"_type":78,"title":88,"_source":80,"_file":89,"_extension":78},"/disclosures/global-floating-disclosure","disclosures","global-floating-disclosure","This page provides general information regarding mortgage loans or home equity lines of credit. Citi’s offerings and lending guidelines may differ.","content:disclosures:global-floating-disclosure.json","Global Floating Disclosure","disclosures/global-floating-disclosure.json",{"title":91,"subtext":7,"portraitImage":92,"imageAlt":93,"imageWidth":94,"background":95,"borderRadius":96,"maxWidth":97,"paddingTopBottom":98,"paddingLeftRight":98,"gap":98,"variant":99},"Citi is #1 in Customer Satisfaction with Mortgage Origination - ***[J.D. Power 2025 Award](https://www.jdpower.com/business/awards)***","/media/jdpower-trophy.png","J.D. Power 2025 Trophy",48,"var(--brand-default)",0,650,16,"default",{"data":101,"body":103,"excerpt":-1,"toc":138},{"title":7,"description":102},"Key insights:",{"type":104,"children":105},"root",[106,113,133],{"type":107,"tag":108,"props":109,"children":110},"element","p",{},[111],{"type":112,"value":102},"text",{"type":107,"tag":114,"props":115,"children":116},"ul",{},[117,123,128],{"type":107,"tag":118,"props":119,"children":120},"li",{},[121],{"type":112,"value":122},"The home-buying process involves 12 key steps, from budgeting, mortgage preapproval and house hunting to inspections, appraisals and closing on your new home",{"type":107,"tag":118,"props":124,"children":125},{},[126],{"type":112,"value":127},"Understanding your finances early-like your budget, credit score and loan options-can help you determine what you can afford and speed up approval",{"type":107,"tag":118,"props":129,"children":130},{},[131],{"type":112,"value":132},"Working with professionals such as real estate agents, appraisers and inspectors can help ensure you're making informed decisions and protect your investment",{"type":107,"tag":108,"props":134,"children":135},{},[136],{"type":112,"value":137},"Ready to buy a home? We’re here to help. We’ve built the ultimate 12-step guide to help you learn how to apply for a mortgage, inspect a potential property and everything else to consider when buying a house. Whether you’re just browsing listings or getting ready to close, you’ll have the tools and understanding you need to navigate the home-buying process stress-free.",{"title":7,"searchDepth":139,"depth":139,"links":140},2,[],{"data":142,"body":144,"excerpt":-1,"toc":155},{"title":7,"description":143},"Wondering if it’s time to settle down? Before you dive into house hunting, make sure you know the facts. Learn how to lay the right foundation for your search and what to know before you hit the open houses.",{"type":104,"children":145},[146,150],{"type":107,"tag":108,"props":147,"children":148},{},[149],{"type":112,"value":143},{"type":107,"tag":151,"props":152,"children":154},"inline-card-grid",{":cards":153},"[{\"eyebrowIcon\":\"\",\"body\":\"We'll show you the ropes, covering grants and loans you might qualify for as a first-time home buyer.\\n\\n\",\"imagePosition\":\"top\",\"ctaType\":\"text-arrow\",\"marginSize\":\"small\",\"isInlineCard\":true,\"headline\":\"Are you a first-time home buyer?\",\"backgroundColor\":\"blue-grey\",\"icon\":\"Penpaper\",\"link\":\"/home-buying/articles/first-time-home-buyer/\",\"ctaText\":\"Learn About First-Time Home Buyer Programs\"},{\"eyebrowIcon\":\"\",\"body\":\"Whether you're thinking about an investment property or a vacation home, we'll cover what you need to know.\",\"imagePosition\":\"top\",\"ctaType\":\"text-arrow\",\"marginSize\":\"small\",\"isInlineCard\":true,\"headline\":\"Ready to buy your next home?\",\"backgroundColor\":\"blue-grey\",\"icon\":\"Homebuyer\",\"link\":\"/home-buying/articles/second-home/\",\"ctaText\":\"How to Buy a Second Home\"}]",[],{"title":7,"searchDepth":139,"depth":139,"links":156},[],{"data":158,"body":160,"excerpt":-1,"toc":166},{"title":7,"description":159},"Budgeting isn’t exactly thrilling, but it's an essential step to know where, when and what you can buy. Our handy calculator will help you estimate your ideal monthly mortgage payment. Just plug in your income and regular debt payments to get an idea of what you can comfortably afford. This will help you realistically target your search so you can find your dream home faster.",{"type":104,"children":161},[162],{"type":107,"tag":108,"props":163,"children":164},{},[165],{"type":112,"value":159},{"title":7,"searchDepth":139,"depth":139,"links":167},[],{"data":169,"body":170,"excerpt":-1,"toc":180},{"title":7,"description":7},{"type":104,"children":171},[172],{"type":107,"tag":108,"props":173,"children":174},{},[175],{"type":107,"tag":176,"props":177,"children":179},"img",{"alt":7,"src":178},"/media/couple-land.jpg",[],{"title":7,"searchDepth":139,"depth":139,"links":181},[],{"data":183,"body":185,"excerpt":-1,"toc":203},{"title":7,"description":184},"Now that your budget is locked and loaded, it’s time to take stock of all the payments you might expect to make. Let’s break it down together, from down payments and mortgage insurance to closing costs and property taxes, along with some fees you might not expect.",{"type":104,"children":186},[187],{"type":107,"tag":108,"props":188,"children":189},{},[190,192,201],{"type":112,"value":191},"Now that your budget is locked and loaded, it’s time to ",{"type":107,"tag":193,"props":194,"children":198},"a",{"href":195,"rel":196},"https://www.mortgage.com/home-buying/articles/how-much-money-do-you-need-to-buy-a-house/",[197],"nofollow",[199],{"type":112,"value":200},"take stock of all the payments",{"type":112,"value":202}," you might expect to make. 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Don’t worry—it’s simpler than you might think.",{"type":104,"children":229},[230],{"type":107,"tag":108,"props":231,"children":232},{},[233,235,241],{"type":112,"value":234},"Get a foot in the door of your dream home by ",{"type":107,"tag":193,"props":236,"children":238},{"href":237},"/home-buying/articles/apply-for-a-mortgage/",[239],{"type":112,"value":240},"getting preapproved for a mortgage",{"type":112,"value":242},". This is a great way to expedite the loan review process and close on a home faster. Lenders may look at your credit report, income and assets to determine your eligibility. 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Before you navigate negotiations, take time to learn about common repair requests, how to determine what a reasonable request is and smart strategies for getting a great deal.",{"type":104,"children":353},[354],{"type":107,"tag":108,"props":355,"children":356},{},[357,359,365],{"type":112,"value":358},"After the inspection, take stock of what needs to be repaired before you take ownership of the home. Some sellers may be more willing than others to spend time and money on certain repairs. Before you ",{"type":107,"tag":193,"props":360,"children":362},{"href":361},"/home-buying/articles/how-to-negotiate-repairs-after-inspection/",[363],{"type":112,"value":364},"navigate negotiations",{"type":112,"value":366},", take time to learn about common repair requests, how to determine what a reasonable request is and smart strategies for getting a great deal.",{"title":7,"searchDepth":139,"depth":139,"links":368},[],{"data":370,"body":372,"excerpt":-1,"toc":378},{"title":7,"description":371},"Get your ribbon-cutting scissors ready. A smooth and successful closing can be the most exciting part of the process. 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Power 2025 award information, visit jdpower.com/awards.",{"type":104,"children":405},[406],{"type":107,"tag":108,"props":407,"children":408},{},[409,411,418],{"type":112,"value":410},"For J.D. Power 2025 award information, visit ",{"type":107,"tag":193,"props":412,"children":415},{"href":413,"rel":414},"https://www.jdpower.com/business/awards",[197],[416],{"type":112,"value":417},"jdpower.com/awards",{"type":112,"value":419},".",{"title":7,"searchDepth":139,"depth":139,"links":421},[],{"_path":423,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":99,"content":424,"_id":425,"_type":78,"title":426,"_source":80,"_file":427,"_extension":78},"/disclosures/default","This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.\n\nTerms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.","content:disclosures:default.json","Default","disclosures/default.json",{"_path":429,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"content":430,"slug":431,"_id":432,"_type":78,"title":433,"_source":80,"_file":434,"_extension":78},"/disclosures/spanish-language-disclosure","\u003Csup>†\u003C/sup>Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.\n\n\u003Cspan lang=\"es\">Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.\u003C/span>","spanish-language-disclosure","content:disclosures:spanish-language-disclosure.json","Spanish Language Disclosure","disclosures/spanish-language-disclosure.json",{"data":436,"body":438,"toc":449},{"title":7,"description":437},"This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.",{"type":104,"children":439},[440,444],{"type":107,"tag":108,"props":441,"children":442},{},[443],{"type":112,"value":437},{"type":107,"tag":108,"props":445,"children":446},{},[447],{"type":112,"value":448},"Terms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. 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If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":104,"children":455},[456,467],{"type":107,"tag":108,"props":457,"children":458},{},[459,465],{"type":107,"tag":460,"props":461,"children":462},"sup",{},[463],{"type":112,"value":464},"†",{"type":112,"value":466},"Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":107,"tag":108,"props":468,"children":469},{},[470],{"type":107,"tag":471,"props":472,"children":474},"span",{"lang":473},"es",[475],{"type":112,"value":476},"Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.",{"title":7,"searchDepth":139,"depth":139,"links":478},[],[480,542,599,646,707,751,815,863,902,950,996],{"_path":481,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":483,"l1":482,"linkNav":484,"heroMedia":488,"teaserImage":491,"slug":493,"sections":494,"date":513,"subheadline":514,"headline":515,"dateModified":516,"isFeatured":6,"tags":517,"link":520,"seo":523,"hasSectionNavigation":27,"_id":526,"_type":78,"title":527,"_source":80,"_file":528,"_extension":78,"tagsDetails":529},"/articles/home-buying/pay-off-debt-or-save-for-a-house","home-buying",6,{"introText":485,"text":486,"to":487},"Ready for the next step? ","Connect with a Citi Specialist","/contact",{"landscape":489,"portrait":490},"/media/should-i-pay-off-debt-or-should-i-save-for-a-house-mobile-768x512.jpg","/media/should-i-pay-off-debt-or-should-i-save-for-a-house-desktop-520x638.jpg",{"src":492},"/media/should-i-pay-off-debt-or-should-i-save-for-a-house-teaser-500x500.jpg","pay-off-debt-or-save-for-a-house",[495,498,501,504,507,510],{"title":496,"content":497},"Why this question matters for homebuyers","Why does it matter if you choose to pay down debt or invest in your homeownership goals? Your debt, credit score and down payment savings are all key to getting your mortgage approved with manageable terms.  \n\nOn the one hand, debt affects both your [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) and [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/)—financial indicators that lenders look at to see how well you handle repayments. If your DTI ratio is too high or your credit score is too low, you might face higher interest rates or struggle to get approved.\n\nOn the other hand, saving up for a bigger down payment can help you borrow less and maybe even skip [private mortgage insurance (PMI)](/home-buying/articles/pmi-home-loan/), saving you money each month. Striking the right balance between paying off debt vs. saving can open up more [mortgage loan options](/home-loans/) and improve your chances of earning a better interest rate. But which goal should you tackle first?",{"title":499,"content":500},"When paying off debt comes first","Focusing on debt first can make sense in many situations.  \n\n### **Reducing high-interest debt**\n\nIf you're carrying debt with high interest, like from credit cards or personal loans, consider tackling that before saving aggressively for a house. Those steep interest payments go directly to the lender and don't help reduce your debt or boost your savings. As a general rule, focus on paying off debt with the highest interest rates. Once you clear that debt, you'll free up extra cash to build your savings.\n\n### **Improving your [debt-to-income (DTI) ratio](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)**\n\nLowering your debt is a surefire way to improve your DTI. Lenders look at this ratio to see how much of your gross monthly income is tied up in debt payments. Most lenders like to see a DTI ratio below 36%, though some allow up to 43%. If yours is higher, especially over 50%, you may be seen as a risky borrower who could struggle with payments. While there are home lending options that accept higher DTI ratios, you may not get favorable loan terms. Ultimately, if you have a high DTI ratio or find it challenging to keep up with bills, you should focus on reducing your debt first.\n\n### **Boosting your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/)**\n\nA better credit score improves your chances of qualifying for a home loan and earning favorable terms. If debt is dragging down your credit score, it may be due to high credit utilization. That’s the amount of debt you have compared to your available credit. To reduce credit score impact, aim for credit utilization below 30% by paying down high-interest debt. Most conventional loans require a minimum FICO® score of 620, but requirements will vary by loan and lender.",{"title":502,"content":503},"When saving for a house takes priority","When your debt is under control, you have more freedom to save for a down payment and react to market conditions.\n\n### **Comfortably managing debt**\n\nIf your DTI ratio and credit score look strong and you feel comfortable juggling your current debt, it might be a good time to save for that down payment. You don’t have to be debt-free to start; many people [afford a home](/calculators/affordability/) with lower-interest debts like student loans. Just be mindful of your other financial goals and obligations. No matter what you’re paying off or saving toward, most experts recommend that you always have an emergency fund that covers 3–6 months’ worth of expenses.\n\n### **Avoiding PMI with 20% down**\n\nSome loans require you to pay [private mortgage insurance](/home-buying/articles/pmi-home-loan/) (PMI) if your down payment is on the smaller side. If you want to shave down your monthly mortgage bill, steering clear of PMI can be a good strategy.\n\nFor [conventional loans](/home-loans/conventional-loan/), you need at least 20% down to avoid mortgage insurance costs. If you get a government-backed [FHA loan](/home-loans/fha-loan/), you’re automatically on the hook for mortgage insurance.\n\nJust remember to explore your mortgage options because [not all loans require a 20% down payment](/home-buying/articles/how-much-down-payment-for-a-house/) or come with PMI strings attached. Even if you can’t avoid PMI entirely, you have the option to [refinance](/refinancing/) down the line for new terms or a different loan.\n\n### **Seizing market opportunity**\n\nIn today’s competitive housing market, it’s smart to stay on top of [current interest rates](/rates/) and home prices. Lower rates can help you afford a loan, but a low-rate environment can also turn into a seller’s market—when an influx of buyers causes a spike in home prices.\n\nThe best thing you can do is keep an eye on trends and forecasts. If it looks like you should purchase sooner rather than later, you may want to focus on saving. But if you’re concerned about rates, paying off debts could help set you up for better mortgage terms in the future.",{"title":505,"content":506},"Balancing both: Debt payoff and savings at the same time","If you’re still split on whether to pay down debt or save, splitting could be the solution. With the right financial approach, you can work toward both goals. A popular budgeting method is the 50/30/20 rule. Here's how it breaks down: 50% of your income goes to essentials like housing and groceries, 30% is for your wants, and the remaining 20% gets split between saving and debt repayment. This way, you can work toward homeownership while keeping debt in check.\n\nBefore you go all in on a strategy, pressure test potential ideas. Plot out a few different scenarios and see how they affect your debt and savings over time. Use our [Affordability Calculator](/calculators/affordability/) to estimate how much house you could afford with different debt amounts and interest rates. You can also unpack the costs that go into budgeting for a home with our [mortgage affordability guide.](/home-buying/articles/how-much-money-do-you-need-to-buy-a-house/) Ultimately, checking in with a financial advisor can help you feel secure in your decisions and chart a clear path forward.",{"title":508,"content":509},"Next steps toward homeownership","When you’re confident in your financial profile and just about ready to [make offers](/home-buying/articles/how-to-make-an-offer/), you’ll want to [get preapproved for a loan](/home-loans/articles/how-to-get-pre-approved/). Preapproval gives you a good picture of what you can afford. It also shows sellers you're a serious buyer with financing already in the works, which can make your offer more competitive. Preapproval streamlines the closing process by getting a lot of the paperwork out of the way early on. All in all, it gives you and the seller peace of mind.",{"title":511,"hideTitle":27,"content":512},"FAQs","::faq{headline=\"FAQs\" :faqs='[{\"question\":\"Is it better to be debt-free before buying a house?\",\"answer\":\"Not necessarily. You don’t have to be completely debt-free to qualify for a mortgage. If your existing debt is manageable and both your credit score and DTI ratio are in a healthy range, you may still be in a strong position to get a mortgage.\"},{\"question\":\"What debt-to-income ratio do lenders prefer?\",\"answer\":\"Lenders usually like to see a debt-to-income (DTI) ratio under 36%, though some loan programs allow up to 43%. If your DTI is close to 50%, it's a good idea to pay down some debt. Keep in mind that DTI requirements can differ depending on the lender and loan type.\"},{\"question\":\"Can I qualify for a mortgage with student loans or credit card debt?\",\"answer\":\"Yes, you can still qualify for a mortgage while carrying debt if your DTI ratio is manageable and your overall credit profile is strong. A steady income and responsible payment history can also work in your favor.\"},{\"question\":\"How much should I save before buying a house?\",\"answer\":\"It's wise to aim for at least 20% of the purchase price. This can help you avoid private mortgage insurance (PMI) and potentially lower your monthly payments. However, you don’t always need 20% down. Some loan programs allow a smaller down payment depending on your qualifications.\"},{\"question\":\"Should I save for a down payment while still paying off student loans?\",\"answer\":\"If you have low-interest student debt, it’s often possible to save for a down payment while paying off your loans. However, if you have a lot of high-interest debt on your plate, it may make sense to focus on lowering your debt first.\"}]'}\n::","2025-10-03T15:11:00.000Z","When you’re facing two big financial goals, how do you decide which takes priority? Let’s take a look at your financial picture to determine whether you should pay off debt or save for a down payment. This is an important decision not only for overall financial health, but for mortgage readiness because your debt and down payment impact your ability to qualify for a home loan. Let’s dig into the factors to consider when deciding whether to pay off debt or invest in your future home, plus how to juggle both successfully.","Should I pay off debt or save for a house?","2026-01-08T06:33:00.000Z",[482,518,519],"credit-score","down-payments",{"introText":521,"body":522,"text":486,"to":487},"Looking for more budgeting tips before buying a house?","We can help you figure out how to balance paying down debt and saving for a home.",{"title":524,"description":525},"Should You Pay Off Debt or Save for a House? | Mortgage.com","Should you pay off debt or save for a house? Learn how lenders view debt, income, savings and credit scores. Discover your best path to mortgage readiness.","content:articles:home-buying:pay-off-debt-or-save-for-a-house.json","Pay Off Debt Or Save For A House","articles/home-buying/pay-off-debt-or-save-for-a-house.json",[530,534,538],{"label":531,"slug":482,"seo":532},"Home Buying",{"description":533},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"label":535,"slug":518,"seo":536},"Credit Score",{"description":537},"Understand how your credit score impacts your ability to qualify for a home loan and how to improve it.",{"label":539,"slug":519,"seo":540},"Down Payments",{"description":541},"Learn more about down payments with helpful articles, tools, and guides to support your homeownership journey.",{"_path":543,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":544,"l1":482,"linkNav":545,"heroMedia":547,"teaserImage":550,"slug":552,"sections":553,"date":575,"subheadline":576,"headline":577,"isFeatured":6,"tags":578,"link":581,"seo":584,"hasSectionNavigation":27,"_id":587,"_type":78,"title":588,"_source":80,"_file":589,"_extension":78,"tagsDetails":590},"/articles/home-buying/how-to-buy-a-house-with-low-income",3,{"introText":546,"text":486,"to":487},"Ready for the next step?",{"landscape":548,"portrait":549},"/media/how-to-buy-a-house-w-low-income-mobile-768x512.jpg","/media/how-to-buy-a-house-w-low-income-desktop-520x638.jpg",{"src":551},"/media/how-to-buy-a-house-w-low-income-teaser-500x500.jpg","how-to-buy-a-house-with-low-income",[554,557,560,563,566,569,572],{"title":555,"content":556},"Is it possible to buy a home on a low income?","You don’t need a high salary to become a homeowner. Lenders look at more than just paychecks when reviewing your application, and  there are low-income mortgage programs and assistance options designed specifically for buyers with limited earnings.\n\nYour approval odds improve when you strengthen factors like your [debt-to-income (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) ratio, [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/), employment history and savings. Strengthening these areas can improve your approval odds, and many buyers successfully combine a [government-backed loan](/home-buying/articles/government-backed-home-loans/) with down payment assistance to make their first home both attainable and affordable.",{"title":558,"content":559},"Loan programs that help low-income buyers","Low-income mortgage loans have unique requirements and benefits. Here are some of the most widely used:\n\n::inline-table{tableLayout=\"waffle\" :headers='[{\"value\":\"Loan Program\"},{\"value\":\"Best For\"},{\"value\":\"Key Benefits\"}]' :rows='[{\"column\":{\"valueOne\":\"FHA Loans\",\"valueTwo\":\"Buyers with lower credit scores (580+ for 3.5% down; 500-579 with 10% down) or limited savings\",\"valueThree\":\"Down payments as low as 3.5%. Flexible credit requirements. Allows higher debt-to-income ratios.\"}},{\"column\":{\"valueOne\":\"USDA Loans\",\"valueTwo\":\"Buyers in eligible rural/suburban areas with income within USDA limits\",\"valueThree\":\"No down payment. Competitive fixed rates. May cover closing costs.\"}},{\"column\":{\"valueOne\":\"VA Loans\",\"valueTwo\":\"Eligible veterans, active-duty members or qualifying surviving spouses \",\"valueThree\":\"No down payment or private mortgage insurance required. Lower funding fees for some borrowers.\"}},{\"column\":{\"valueOne\":\"State/Local Down Payment Assistance\",\"valueTwo\":\"First-time or income-qualified buyers (limits vary by program)\",\"valueThree\":\"Grants or forgivable loans to cover down payment and/or closing costs\"}}]'}\n::",{"title":561,"content":562},"Understanding down payment assistance programs ","If covering the [down payment](/tags/down-payments/) or [closing costs](/home-buying/articles/closing-costs/) is holding you back, down payment assistance programs (DPAs) can help bridge the gap. DPAs provide funds either as grants or low-interest loans to help cover these costs. They’re offered through state and local governments, nonprofits and even some employers.\n\nEligibility requirements vary, but many programs are designed for:\n\n* **First-time home buyers**: A first-time home buyer is often defined as someone who hasn’t owned a home in the past three years. Our [first-time home buyer guide](/home-buying/articles/first-time-home-buyer/) looks in-depth at who qualifies, loan options, tips, and more.\n* **Buyers within certain income limits**: These limits depend on your location and household size, and may be higher than you might expect.\n* **Homes under a purchase price cap:** This will typically be based on the median home price in your area.\n\nWhere to start:\n\n* Visit your state housing agency’s website for program listings and requirements.\n* Check HUD’s network of [local housing counseling agencies](https://www.hud.gov/i_want_to/talk_to_a_housing_counselor). If you’re already working with a lender, ask whether they partner with any down payment assistance providers. They may be able to connect you directly during pre-approval.\n\n::callout{body=\"Some down payment assistance programs have income limits well above what most consider “low income.” You might qualify even if you earn close to your area’s median income.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::",{"title":564,"content":565},"Tips to strengthen your mortgage application","A strong application can help you secure a better interest rate and lower monthly payments —even if you qualify for a low-income home loan. Here are some ways you can set yourself up for success:\n\n* **Boost your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/)**:  Pay down revolving balances, fix errors on your credit report and review our guide on [buying a house with bad credit](/home-loans/articles/how-to-buy-a-house-with-bad-credit/).\n* **Lower your debt-to-income ratio:** Eliminating even small debts can make a big difference—learn more about **[how your debt-to-income ratio affects mortgage approval](/home-buying/articles/what-is-a-good-debt-to-income-ratio/)** to understand where you stand and how to improve it.\n* **Consider a co-borrower**: Adding another trusted person with steady income can increase your buying power.\n* **Show income stability:** Maintain steady employment and gather proof like W-2s, pay stubs and tax returns before applying.",{"title":567,"content":568},"Other costs to prepare for","Strong finances at the time of purchase are just part of the equation. Planning for ongoing and upfront expenses is equally important. Here are common costs to budget for:\n\n::content-table{headline=\"Additional costs of buying a home\" body=\"Be sure to include these in your budget.\" :tableData='[{\"row\":[{\"column\":\"Cost\"},{\"column\":\"Estimated Range\"}]},{\"row\":[{\"column\":\"Home inspection \"},{\"column\":\"$300-$500\"}]},{\"row\":[{\"column\":\"Appraisal \"},{\"column\":\"$300-$600\"}]},{\"row\":[{\"column\":\"Homeowners insurance \"},{\"column\":\"$1,000-$1,500/year\"}]},{\"row\":[{\"column\":\"Closing costs \"},{\"column\":\"2-5% of purchase price\"}]}]'}\n::\n\nWant to better understand closing costs? Check out our [guide on closing costs](/home-buying/articles/closing-costs/)—what they include,  how they’re calculated and ways to reduce them.",{"title":570,"content":571},"Common mistakes to avoid","Even the best low-income mortgage program can’t protect you from costly missteps. Here’s what to watch for:\n\n**Skipping [pre-approval](/home-loans/articles/how-to-get-pre-approved/)**\n\nWithout it, you may not know your true budget. Use our [Mortgage Calculator](/calculators/monthly/) to get a sense of what you might qualify for.\n\n**Overestimating your budget**\n\nJust because you’re approved for a certain amount doesn’t mean you should spend it all. Aim for a [monthly payment](/calculators/monthly/) that still leaves room for savings and emergencies. Our [Affordability Calculator](/calculators/affordability/) is a great place to start.\n\n**Ignoring assistance programs**\n\nMany buyers miss out on thousands in grants or low-interest loans simply because they don’t research what’s available.\n\n**Overlooking ongoing costs**\n\nFactor in property taxes, insurance, HOA fees and maintenance before you buy.\n\n**Rushing the process**\n\nTaking time to improve your credit, pay down debt and save can help you get better terms and more long-term stability.",{"title":573,"hideTitle":27,"content":574},"Buying a home with a low income FAQs","\n\n::faq{headline=\"Buying a home with a low income FAQs\" :faqs='[{\"question\":\"Can I buy a house with no down payment?\",\"answer\":\"Yes. Certain loan programs, like USDA loans (for rural and some suburban areas) and VA loans (for qualifying service members, veterans and some surviving spouses) offer 100% financing with no down payment required.\"},{\"question\":\"What is the minimum income required to qualify for a mortgage?\",\"answer\":\"There’s no set income threshold. Lenders look at your overall financial picture, including your debt-to-income (DTI) ratio, credit score and employment history, to determine how much you can afford to borrow.\"},{\"question\":\"What credit score do I need for a low-income loan?\",\"answer\":\"FHA loans accept credit scores as low as 580 with a 3.5% down payment. Some lenders may approve lower scores with a higher down payment or additional compensating factors.\"},{\"question\":\"Are there programs that help with down payments?\",\"answer\":\"Yes—down payment assistance programs from state and local agencies, nonprofits and even some employers offer grants or low-interest loans to help cover part or all of your down payment and sometimes closing costs.\"},{\"question\":\"Can I get a co-signer if I don’t qualify alone?\",\"answer\":\"Yes. A co-signer (or co-borrower) with stronger finances can help you meet income or credit requirements. Just remember, they’re equally responsible for the loan.\"}]'}\n::","2025-09-08T13:31:00.000Z","[Buying a home](/home-buying/) on a modest income can feel daunting, but it’s far from impossible. This guide covers the most common home loans for low-income buyers, with tips to boost your eligibility and a range of resources—whether you’re a first-time home buyer navigating the process or a returning buyer ready to invest again.","How to buy a house with low income",[482,579,580],"loan-types","budget-planning",{"introText":582,"body":583,"text":486,"to":487},"Need help navigating low-income loan options?","Let’s talk it through together.",{"title":585,"description":586},"Buying Your Home On a Low Income | Citi Mortgage","Learn how to buy a home with low income, including loan options, programs, and tips that can help make homeownership possible.","content:articles:home-buying:how-to-buy-a-house-with-low-income.json","How To Buy A House With Low Income","articles/home-buying/how-to-buy-a-house-with-low-income.json",[591,595,530],{"label":592,"slug":580,"seo":593},"Budget Planning",{"description":594},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":596,"slug":579,"seo":597},"Loan Types",{"description":598},"Explore resources about loan types—including types, requirements, and how to choose the right mortgage option.",{"_path":600,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":601,"l1":482,"linkNav":602,"heroMedia":603,"teaserImage":606,"slug":608,"disclosure":99,"sections":609,"date":631,"subheadline":632,"headline":633,"dateModified":634,"isFeatured":6,"tags":635,"link":636,"seo":639,"hasSectionNavigation":27,"_id":642,"_type":78,"title":643,"_source":80,"_file":644,"_extension":78,"tagsDetails":645},"/articles/home-buying/what-is-cost-of-living",5,{"introText":546,"text":486,"to":487},{"landscape":604,"portrait":605},"/media/cost-of-living-mobile-768x512.jpg","/media/cost-of-living-desktop-520x638.jpg",{"src":607},"/media/cost-of-living-teaser-500x500.jpg","what-is-cost-of-living",[610,613,616,619,622,625,628],{"title":611,"content":612},"What does “cost of living” mean?","Think of cost of living as a snapshot of how far your income goes in one location versus another. For example, in some cities, an income of $2,500 a month might cover rent, groceries and your car payment. In other places, that amount may barely cover housing. Calculating cost of living is a practical way to set realistic expectations when budgeting, job hunting or planning a move.",{"title":614,"content":615},"How is cost of living calculated?","Most cost-of-living indexes compare a selection of major spending categories to show how affordable (or not) one place is compared to another.\n\n::card{eyebrowIcon=\"\" body=\"Curious what life might cost in a new city? Our Cost-Of-Living Calculator may help.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" :isInlineCard=false headline=\"Compare cost of living with our free calculator\" backgroundColor=\"\" icon=\"Calculator\" link=\"/calculators/cost-of-living/\" ctaText=\"Learn More\"}\n::\n\n### What’s included in cost-of-living estimates?\n\nA common misconception is that housing is the only cost that matters—but it's just one part of the equation. A true cost-of-living comparison takes into account all of the major expenses that impact your daily life. Cost of living often varies depending on the source, but here’s what typically gets factored in: \n\n* **Housing:** Rent or mortgage payments, property taxes and homeowners or renters insurance. \n* **Groceries:** Basic food and household items like milk, meat, produce and cleaning supplies. \n* **Utilities:** Monthly bills for electricity, natural gas, water, garbage collection, phone, internet and cable service. \n* **Transportation:** Car payments, gas, car insurance or public transit fares.\n* **Healthcare:** Out-of-pocket expenses for medical care, insurance premiums, prescriptions and routine care. \n* **Taxes:** Local and state income, property and sales tax rates—all of which can impact take-home pay and everyday expenses. \n\nOther categories that may be included are: \n\n* **Childcare and education:** Daycare, babysitters and school fees.\n* **Miscellaneous/personal spending:** Clothing, entertainment, dining and other flexible personal expenses. \n\n###  Who calculates cost of living? \n\nCost-of-living comparisons are compiled by several trusted organizations—some government, some academic and some designed with consumers in mind. Each one offers a different perspective on everyday costs across the U.S. Here’s a quick guide to some of the most reliable sources: \n\n* **Bureau of Labor Statistics:** Tracks national price trends through the Consumer Price Index—a key measure of inflation and cost-of-living changes over time. \n* **Council for Community and Economic Research:** Publishes the Cost of Living Index, which compares prices in more than 300 U.S. cities across categories like housing, groceries and transportation. \n* **MIT Living Wage Calculator:** Estimates the income needed to meet basic expenses by location and household size. \n* **Bureau of Economic Analysis:** Provides Regional Price Parities, which show how prices vary from state to state and city to city, helping you compare purchasing power across regions.",{"title":617,"content":618},"Cost of living by state (2025 data)","One of the easiest ways to compare costs across the country is by using the Cost of Living Index, published by the Council for Community and Economic Research. Each location receives a score based on how its prices stack up against the national average, which is set at 100. \n\n* A score above 100 means the area is more expensive than average.\n* A score below 100 means it’s more affordable. \n\nThis index takes into account everyday expenses like housing, groceries, transportation and healthcare, giving you a well-rounded view of local costs.\n\n### Cost-of-living trends \n\nWhen you zoom out and look at the national picture, some clear patterns emerge. The Northeast and West Coast are typically the most expensive, driven by high housing costs, local taxes and elevated wages in dense urban centers. Meanwhile, the Midwest and South tend to be more budget friendly thanks to lower housing costs and generally modest tax rates. And Sunbelt states like Florida, Texas and Tennessee often land just above the national average, offering a mix of affordability and strong job growth—especially in areas that don’t charge state income tax. \n\n### Highest cost of living states \n\nThe states with the highest cost of living include Hawaii, Alaska, California, Massachusetts, New York and Washington, D.C. Hawaii regularly tops the list, with prices for housing and groceries well above average. In California and New York, high housing demand, income taxes and expensive services drive up the overall cost of living. For example, California’s state income tax tops out at 13.3% for those whose annual household income is $1 million or more, the highest in the country. \n\n### Lowest cost of living states \n\nThe best states for cost of living—like West Virginia, Oklahoma and Kansas—consistently rank among the most affordable places to live. These states offer housing prices 20-30% below the national median and boast lower costs for essentials like food, utilities and healthcare. Oklahoma also has no state-level property tax, and both Oklahoma and West Virginia have relatively low income tax rates, helping stretch your take-home pay. \n\n### States with the highest cost of living\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Rank\"},{\"value\":\"State\"},{\"value\":\"Index #\"}]' :rows='[{\"column\":{\"valueOne\":\"1\",\"valueTwo\":\"Hawaii\",\"valueThree\":\"179.7\"}},{\"column\":{\"valueOne\":\"2\",\"valueThree\":\"150.8\",\"valueTwo\":\"Massachusetts\"}},{\"column\":{\"valueTwo\":\"California\",\"valueThree\":\"136.7\",\"valueOne\":\"3\"}},{\"column\":{\"valueTwo\":\"District of Columbia\",\"valueThree\":\"135.2\",\"valueOne\":\"4\"}},{\"column\":{\"valueOne\":\"5\",\"valueTwo\":\"Alaska\",\"valueThree\":\"127.7\"}}]'}\n::\n\n### States with the lowest cost of living  \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Rank\"},{\"value\":\"State\"},{\"value\":\"Index #\"}]' :rows='[{\"column\":{\"valueTwo\":\"Oklahoma \",\"valueThree\":\"84.4\",\"valueOne\":\"1\"}},{\"column\":{\"valueTwo\":\"Mississippi\",\"valueThree\":\"85.5\",\"valueOne\":\"2\"}},{\"column\":{\"valueTwo\":\"Alabama\",\"valueOne\":\"3\",\"valueThree\":\"87.9\"}},{\"column\":{\"valueTwo\":\"West Virginia\",\"valueOne\":\"4\",\"valueThree\":\"88.1\"}},{\"column\":{\"valueTwo\":\"Kansas\",\"valueThree\":\"88.9\",\"valueOne\":\"5\"}}]'}\n::\n\nSource: [Missouri Economic Research and Information Center](https://meric.mo.gov/data/cost-living-data-series?). Last updated Q3 2025.",{"title":620,"content":621},"Comparing cost of living by city","Cost of living can vary just as much between cities as it does between states—sometimes even more. Large metro areas like New York City and San Francisco routinely rank among the most expensive in the country, driven by sky-high rent, steep taxes and pricey everyday essentials. In contrast, rapidly growing cities like Austin and Tampa offer more affordable living, thanks to lower housing costs and no state income tax.\n\nCost of living examples: NYC vs. Austin\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Expense category\"},{\"value\":\"New York City\"},{\"value\":\"Austin\"}]' :rows='[{\"column\":{\"valueOne\":\"Rent\",\"valueTwo\":\"$4,110.30\",\"valueThree\":\"$2,046.24\"}},{\"column\":{\"valueOne\":\"Basic utilities\",\"valueTwo\":\"$182.32\",\"valueThree\":\"$173.55\"}},{\"column\":{\"valueOne\":\"Income taxes\",\"valueTwo\":\"State income tax up to 10.9%\",\"valueThree\":\"No state income tax\"}}]'}\n::\n\nEven within the same state, the cost of living can vary a lot. For example, moving from Albany to NYC or Fresno to San Francisco could raise your expenses significantly. That’s why it pays to compare individual metro areas—not just states—so you can gain a clear idea of how far your budget might go in different areas.",{"title":623,"content":624},"How location affects affordability","It’s not just about how much you earn—it’s how far your money goes. A $60,000 salary might comfortably cover the essentials in San Antonio but fall short in San Francisco. That’s why understanding the cost of living is key when planning a move or switching jobs. \n\nWith more people working remotely, many are choosing to live in lower-cost cities while keeping higher-paying jobs in expensive metro areas—gaining more space, savings and overall higher quality of life.",{"title":626,"content":627},"What affects cost of living the most?","Housing tops the list. Rent or mortgage payments make up the largest portion of a household budget. For example, average monthly rent in San Jose is around $3,000—more than double the $1,450 average in Cincinnati. \n\nTaxes are another major expense. States like Texas, Florida and Alaska don’t tax income, but they often make up for it with higher property or sales taxes. In contrast, residents of New York and California may pay 9-10% in state income taxes. Healthcare and childcare costs also vary widely by region. For young families, childcare alone can add thousands of dollars per year. \n\nBroad economic factors like inflation and supply chain disruptions can also impact everyday costs. For instance, in July 2025, gas prices in California increased to an average of $4.31 per gallon—far above the national average—due to various supply chain constraints. Even as national inflation trends ease, local challenges can continue to push prices higher.\n\nFor homebuyers, mortgage terms can significantly influence long-term affordability. Factors like interest rates, down payment requirements and loan structure all affect how manageable monthly housing costs are. Exploring different mortgage options, such as Citi’s [home loan](/home-loans/) offerings, may help align housing costs with your broader cost-of-living budget.",{"title":629,"content":630,"hideTitle":27},"Cost of Living FAQs","::faq{:faqs='[{\"question\":\"What does cost of living mean?\",\"answer\":\"Cost of living is the amount of money needed to cover essential expenses like housing, food, transportation and healthcare in a specific city or region. It’s a key factor in determining how affordable a location is, and it helps you compare locations when considering a move or a new job.\"},{\"question\":\"How do I compare cost of living between cities?\",\"answer\":\"You may be able to use our Cost-of-Living Calculator to compare expenses in different cities. You can also consult tools like the Cost of Living Index, published by the Council for Community and Economic Research, which compares prices across more than 300 U.S. metro areas. These tools help you estimate how your expenses will change if you move.\"},{\"question\":\"What is cost of living: core components in estimates\",\"answer\":\"Typical cost-of-living estimates include major budget categories like housing, groceries, utilities, transportation, healthcare and taxes. Depending on the source, they may also factor in childcare and other everyday costs.\"},{\"question\":\"What is the most expensive state to live in?\",\"answer\":\"As of 2025, Hawaii has the highest cost of living in the U.S. Housing costs, grocery prices and everyday goods are well above the national average due to geographic isolation and limited supply chains.\"},{\"question\":\"Does cost of living affect salary?\",\"answer\":\"Yes, cost of living usually impacts salary offers. Employers in higher-cost cities typically offer increased compensation to help cover higher expenses like rent, transportation and local taxes. If you’re relocating, it’s a good idea to factor in both salary and cost of living to understand your true buying power.\"}]' headline=\"Cost of Living FAQs\"}\n::","2025-07-28T07:58:00.000-07:00","**Key insights:** \n\n* Cost of living is how much money you need to cover necessary costs in a given place \n* The prices of housing, groceries, utilities and more factor into an area’s cost of living \n* Comparing cost of living in different states and cities can help you plan for a move or decide whether to take a new job \n\nCost of living is how much money it takes to cover your daily expenses, like housing, groceries, healthcare, transportation and taxes, in a specific location. Whether you’re relocating, switching jobs or just curious how your money stacks up, a cost-of-living comparison by state or city can help you plan smarter for your next move.","What is cost of living? A state and city breakdown","2026-04-01T14:19:00.000Z",[482,580],{"introText":637,"body":638,"text":486,"to":487},"Planning a Move?","We can help you explore options that fit your budget.",{"title":640,"description":641},"What Is Cost of Living? State Comparison Guide | Mortgage.com","Understand what cost of living means and how it varies by state and city. Learn how to compare expenses with cost of living before making a move.","content:articles:home-buying:what-is-cost-of-living.json","What Is Cost Of Living","articles/home-buying/what-is-cost-of-living.json",[591,530],{"_path":647,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":648,"l1":482,"linkNav":649,"heroMedia":650,"teaserImage":653,"slug":655,"disclosure":99,"sections":656,"date":684,"subheadline":685,"headline":686,"isFeatured":27,"tags":687,"link":690,"seo":692,"hasSectionNavigation":27,"_id":695,"_type":78,"title":696,"_source":80,"_file":697,"_extension":78,"tagsDetails":698},"/articles/home-buying/first-time-home-buyer",9,{"introText":546,"text":486,"to":487},{"landscape":651,"portrait":652},"/media/article-first-time-home-buyer-mobile-768x512.jpg","/media/article-first-time-home-buyer-mobile-desktop-520x638.jpg",{"src":654},"/media/article-first-time-home-buyer-mobile-teaser-500x500.jpg","first-time-home-buyer",[657,660,663,666,669,672,675,678,681],{"title":658,"hideTitle":27,"content":659},"Disclaimer","Disclaimer: Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":661,"content":662},"Who is a first-time home buyer?","You don’t have to be brand new to real estate to qualify as a first-time home buyer. According to the Federal Housing Administration (FHA) and the IRS, you may be considered a first-time buyer if you haven’t owned a principal residence in the past three years. A principal residence is the home where you live most of the time—not a vacation or rental property.\n\nYou may also qualify if:\n\n* You previously owned a mobile or manufactured home that wasn’t permanently attached to a foundation\n* You inherited a home, but never lived in it as your primary residence\n* You owned a property that didn’t meet local or state building codes and would have cost more to repair than rebuild\n\nThanks to these broader definitions, more people are eligible for first-time home buyer programs, grants and loans than you might expect.",{"title":664,"content":665},"What are the benefits of first-time buyer programs?","First-time home buyer programs are designed to make homeownership more accessible, especially if you’re working with a tight budget or limited credit history. These programs can help ease common roadblocks by offering:\n\n* **Low or no down payment:** Some loans require as little as 3% down, or even nothing at all.\n* **Reduced closing costs:** Grants or lender credits can offset fees like inspections, appraisals and title services.\n* **Flexible credit score requirements:** Many programs are open to buyers with fair or limited credit histories.\n* **Homeownership education courses:** You’ll get access to courses that walk you through budgeting, mortgage basics and long-term financial planning.\n* **State and federal tax credits:** Depending on where you live, you may qualify for valuable tax breaks that lower your overall cost of buying.\n\nThe goal of these programs is to make homeownership feel possible—so you can focus on finding the right place to live, not just on how to pay for it.",{"title":667,"content":668},"How do I qualify for a first-time buyer program?","You don’t have to be a total newcomer to qualify as a first-time home buyer. In fact, many programs define a first-time buyer as someone who hasn’t owned a home in the past three years. So, even if you’ve owned property before, you may still be eligible if it’s been a while.\n\nOther situations that may qualify you include owning a mobile or temporary property that wasn’t attached to a permanent foundation, or having owned a property that didn’t meet safety regulations and required repairs that exceeded its value.\n\nWhile each program has its own requirements, two major factors typically come into play:\n\n1. Your [debt-to-income ratio ](/home-buying/articles/what-is-a-good-debt-to-income-ratio/) (DTI): Your DTI measures how much of your monthly income goes toward debt payments. A lower ratio signals to lenders that you’re more likely to manage mortgage payments consistently. While exact limits vary, many programs prefer a DTI of 43% or lower.\n2. [Your credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/): Your credit score helps determine your eligibility and the loan terms you qualify for. Higher scores unlock better interest rates and more loan options, while lower scores may limit your choices or require extra documentation. Minimum score requirements vary by loan type (FHA, VA, USDA, etc.), so it’s a good idea to check what your score needs to be for the program you're targeting.\n\nOther factors that can affect your eligibility are:\n\n* **Income limits:** Many programs set income caps based on your area’s median income.\n* **Home purchase price caps:** Some programs limit how much you can spend on your new home, ensuring that the assistance is directed to those who need it most.\n* **Location:** Some programs are only available in specific counties, cities or ZIP codes. It’s important to check that the program you’re interested in applies to your location.\n* **Education courses:** You may need to complete home buyer education classes.\n\nUnderstanding how these criteria apply to your situation can help you narrow down the best first-time buyer options for your needs.",{"title":670,"content":671},"Types of first-time home buyer programs","Before diving into specific loan types, let’s look at the big picture. Most first-time buyer programs fall into four main categories. Here’s a quick overview:\n\n### Institutional lender programs\n\nBanks and other private lenders offer [mortgage](/home-loans/articles/what-is-a-mortgage/) programs specifically for first-time buyers with relaxed requirements and reduced costs. For example, Citi’s [HomeRun® Mortgage](/home-loans/home-run/) offers a low [down payment](/home-buying/articles/how-much-down-payment-for-a-house/) option that helps support buyers from a wide range of financial situations as they take their first steps up the property ladder. However, such programs may be available only in select markets or have other limitations, such as income or purchase price caps, so be sure to read the fine print. \n\n::disclaimer-dialog{buttonCopy=\" HomeRun Terms & Conditions\" :dialogCopy='\"## HomeRun Terms & Conditions\\n\\nHomeRun is available in Citibank assessment areas and specific census tracts in Arlington, VA, Atlanta, GA, Austin, TX, Cambridge, MA, Dallas, TX, Denver, CO, Frederick, MD, Houston, TX, Marietta, GA, Newark, NJ, New York, NY, Philadelphia, PA, San Jose, CA and Washington, D.C. Metropolitan Statistical Areas for loans on the primary residence of borrowers who qualify, and is also subject to income, property, product and other restrictions. To be eligible for up to 97% financing, the property must be a single-family home (including condos, co-ops and planned unit development) with a loan amount up to $806,500. Certain condo and co-op projects may be subject to lower LTVs. Single-family homes in certain high-cost markets with loan amounts between $806,501 and $1,209,750 are eligible for up to 95% financing. Non-traditional credit on conforming loan sizes requires 5% down payment. Non-traditional credit is not permitted on loans exceeding conforming loan limits. Two-unit properties are eligible for 89.99% financing with loan amounts up to $1,032,650, or 85% up to $1,548,975 in certain high-cost markets. In addition to home buying education, borrowers of two-unit properties must participate in landlord training from a Citi-approved community agency prior to closing. HomeRun is not available on cash-out refinance transactions.\"'}\n::\n\n### Government-backed programs\n\nWhen we say \"government-backed\" programs, we're talking about three main types:\n\n* Government-insured: These loans are insured by a government agency to protect lenders if the borrower defaults. A common example is the [Federal Housing Administration (FHA) loan](/home-loans/fha-loan/), designed to help first-time buyers qualify for a low down payment.\n* Government-sponsored entities: Fannie Mae and Freddie Mac help keep the mortgage market affordable and stable by buying loans from lenders and selling them as securities.\n* Government-guaranteed entities: [VA loans](/home-loans/va-loan/), for example, are guaranteed by the government, which ensures the lender is covered if the borrower fails to repay. VA loans are available to active-duty service members, veterans and their surviving spouses.\n\n### State & local programs\n\nMany states and localities offer programs such as down payment assistance, [competitive mortgage rates](/rates/) and tax credits tailored to make homeownership more accessible. Sometimes, you can even combine these offerings with federal programs to maximize your benefits. \n\n### Charitable, nonprofit & other programs\n\nIn addition to government and institutional offerings, there are also charitable and nonprofit programs that provide grants and assistance, often targeted at specific communities. These can be hidden gems for first-time buyers, especially if you’re part of a local initiative or employee program.",{"title":673,"content":674},"What loans are available for first-time home buyers?","Now that you’ve got the big picture, let’s dig deeper into the popular loans, programs and grants.\n\n### FHA Loans\n\n[FHA loans](/home-loans/fha-loan/) let you put down as little as 3.5% if your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) is at least 580. Plus, they come with a unique perk: your mortgage is [assumable](/home-buying/articles/what-is-an-assumable-mortgage/). That means if you put your home back on the market, a buyer can take over your loan with the same interest rate, making it a great selling point. But keep in mind, FHA loans come with mandatory [mortgage insurance premiums (MIP)](/home-buying/articles/mortgage-insurance/) that may weigh down your monthly payment. Lenders, like Citi, have stricter requirements for the minimum credit score. In addition, there are restrictions and requirements for a buyer to assume an FHA mortgage.   \n\n### Conventional 97 Mortgage Loans\n\nFannie Mae and Freddie Mac have their own low-down-payment alternatives to FHA loans. As the name hints, a conventional 97 loan lets you put down 3% of your own funds and borrow 97% of the home’s value from a lender. To land 3% down, you must have a [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) of at least 620, pay for [private mortgage insurance](/home-buying/articles/pmi-home-loan/) and take a homeownership education course.\n\n### VA Loans\n\n[VA loans](/home-loans/va-loan/) are available to veterans, active-duty service members and eligible surviving spouses. You may qualify for competitive interest rates thanks to support from the U.S. Department of Veterans Affairs. You’ll need to meet VA eligibility guidelines, but for those who qualify, VA loans can be a cost-saving option.\n\n### USDA Loans\n\n[US Department of Agriculture loans](/home-loans/usda-loan/) are designed for buyers in eligible rural and suburban areas, offering no down payment options and lower mortgage insurance costs. Income and location limits apply, making them ideal for those looking outside major metro areas. \n\n### Citi HomeRun Mortgage\n\nCiti’s HomeRun Mortgage is built for first-time buyers and those in underserved communities. Requiring as little as 3% down and no PMI, this mortgage option helps make homeownership more accessible. [HomeRun](/home-loans/home-run/) also offers flexible credit guidelines and allows non-traditional income sources to support buyers who may not qualify for conventional loans.\n\n### HomeReady® and Home Possible® loans\n\n[](/home-loans/home-ready-home-possible)These programs from [Fannie Mae and Freddie Mac](/home-loans/home-ready-home-possible/) cater to low- to moderate-income buyers. Requiring just 3% down and offering the ability to use gift funds or grants, they’re especially helpful if you’re buying in a high-cost area or earning less than the area’s median income.",{"title":676,"content":677},"Are there first-time buyer grants by state?","Many states offer first-time home buyer grants and assistance programs that can help cover upfront costs like the down payment and closing fees. These programs are typically provided through each state’s Housing Finance Authority (HFA) and may be combined with federal or lender-backed loan options.\n\n### Down payment assistance (DPA)\n\nSaving for a down payment is one of the biggest hurdles for new buyers. That’s why many states offer down payment assistance (DPA) through grants or forgivable loans. These programs can cover thousands of dollars toward your purchase—some with no repayment required if you stay in the home for a certain number of years.\n\n### Closing cost support\n\nState and local programs may help with closing costs like inspections, title fees and escrow charges. Support may come in the form of grants, deferred-payment loans or matched savings programs. These can ease the financial burden of homebuying and help you move forward with less cash up front.\n\n### Explore state programs\n\nGrant and assistance programs vary widely by location. Here are some popular state-level options to explore:\n\n* California: [CalHFA MyHome Assistance Program](https://www.calhfa.ca.gov/homebuyer/programs/myhome.htm?utm_source=chatgpt.com)\n* [](https://www.tdhca.texas.gov/programs/texas-bootstrap-loan-program)Florida: [Florida Assist and HFA Preferred programs](https://www.floridahousing.org/programs/homebuyer-overview-page?utm_source=chatgpt.com)\n* Texas: [My First Texas Home ](https://thetexashomebuyerprogram.com/products/my-first-texas-home)and [Texas Bootstrap Loan Program](https://www.tdhca.texas.gov/programs/texas-bootstrap-loan-program)\n* New York: [HomeFirst Down Payment Assistance](https://www.nyc.gov/site/hpd/services-and-information/homefirst-down-payment-assistance-program.page)\n* Illinois: [IHDAccess Forgivable](https://www.inb.com/loans/mortgages/ihdaccess-forgivable-mortgage-loan/) and [SmartBuy programs](https://www.ihdamortgage.org/smartbuy)\n\nTo get the most accurate info, visit your state’s Housing Finance Authority website. Also, be sure to check out our [Cost of Living Calculator](/calculators/cost-of-living/) to possibly evaluate affordability in your state, or our [Home Affordability Calculator](/calculators/affordability/) to see how much home you can afford. \n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Many first-time buyers combine a low-down-payment loan with state or employer assistance programs to maximize savings. You don’t have to choose just one program—look into all the options that might apply to you.\"}\n::",{"title":679,"content":680},"Charitable, nonprofit & other first-time home buyer programs","Plenty of charitable, nonprofit and third-party groups want to see homeownership thrive in their community. We’ll cover a few standout programs, but look into what’s available in your neck of the woods, from company benefits to local housing initiatives.\n\n### Habitat for Humanity\n\nThis nonprofit rolls up its sleeves and builds or revamps homes for those in need. They offer generous zero-interest loans to first-time home buyers who earn 60% or less than the local median income.\n\n### Neighborhood Assistance Corporation of America\n\nThis HUD-certified nonprofit helps first-time home buyers secure a low-rate mortgage without a down payment, closing costs or mortgage insurance. If you have [lower credit](/home-loans/articles/how-to-buy-a-house-with-bad-credit), no worries—this program uses rent payment history and other factors to determine your eligibility.\n\n### Employer-sponsored first-time home buyer programs\n\nSome employers also offer benefits to help you buy a home, including matching contributions or direct grants toward your down payment. Policies will vary, so you’ll have to read up on your company benefits. Also, be on the lookout for rules around income limits and time on the job.\n\n### Loans and grants for student borrowers\n\nMany programs cater to students with limited savings and lots of debt. Some schools even offer grants, scholarships or fund-matching to cover upfront costs. For instance, Ohio offers a Grants for Grads program that provides up to 5% down payment support for recent students. Check with your housing department or financial aid office to find out what's possible with your alma mater.",{"title":682,"hideTitle":27,"content":683},"First-time home buyer FAQs","::faq{headline=\"First-time home buyer FAQs\" :faqs='[{\"question\":\"Can I qualify if I’ve owned a home before?\",\"answer\":\"Yes. Many programs define “first-time home buyer” as someone who hasn’t owned a principal residence in the past three years. Additionally, you may qualify if your previous home was a mobile home or temporary structure, or if it didn’t meet safety regulations and required repairs that exceeded the home’s value.\"},{\"question\":\"Can I combine grants with mortgage programs?\",\"answer\":\"Often, yes. Many buyers combine state or local down payment assistance grants with federal loans like FHA or USDA programs. That said, every program has its own rules, so be sure to review the details to see which combinations are allowed. \"},{\"question\":\"What documents do I need to apply?\",\"answer\":\"Required documents vary by program, but most will ask for: Proof of income (pay stubs, tax returns, or bank statements), your credit report, proof of employment, debt and asset information (e.g., car loans, student loans, savings), identification (driver’s license, social security number), if applicable, proof of previous homeownership or housing history. Check with your lender or housing agency for a full checklist tailored to your program.\"},{\"question\":\"How long does the approval process take?\",\"answer\":\"It depends on the program and your financial profile. On average, approval can take a few weeks to a couple of months. Factors that may impact your timeline include: The type of loan or assistance program, the complexity of your financial situation and how quickly you provide documentation. Staying in close contact with your lender or housing counselor can help you stay on track.\"}]'}\n::","2025-07-23T10:00:00.000-05:00","First-time home buyer programs, grants and loans can make the path to homeownership more affordable than you might expect. From down payment assistance to special loan programs with flexible terms, there are numerous resources designed to help first-time buyers make their dream of homeownership a reality.\n\nExplore your [state’s first-time home buyer programs](https://www.hud.gov/states) and learn how to qualify step by step.","First-time home buyers: your guide to programs, grants and loans",[688,689,482],"first-time-buyer","real-estate-process",{"introText":691,"text":486,"to":487,"body":583},"Need help finding the right program for you? ",{"title":693,"description":694},"First-Time Home Buyer Programs for You | Citi Mortgage","Learn what it means to be a first-time home buyer, explore loan options and grants, and get tips to qualify for your first mortgage.","content:articles:home-buying:first-time-home-buyer.json","First Time Home Buyer","articles/home-buying/first-time-home-buyer.json",[699,703,530],{"label":700,"slug":688,"seo":701},"First Time Buyer",{"description":702},"Learn more about first time buyer with helpful articles, tools, and guides to support your homeownership journey.",{"label":704,"slug":689,"seo":705},"Real Estate Process",{"description":706},"Learn more about real estate process with helpful articles, tools, and guides to support your homeownership journey.",{"_path":708,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":483,"l1":482,"linkNav":709,"heroMedia":710,"teaserImage":713,"slug":715,"sections":716,"date":732,"subheadline":733,"headline":734,"isFeatured":6,"tags":735,"link":737,"seo":740,"hasSectionNavigation":27,"_id":743,"_type":78,"title":744,"_source":80,"_file":745,"_extension":78,"tagsDetails":746},"/articles/home-buying/mortgage-insurance",{"introText":546,"text":486,"to":487},{"landscape":711,"portrait":712},"/media/article-mortgage-insurance-mobile-768x512.jpg","/media/article-mortgage-insurance-desktop-520x638.jpg",{"src":714},"/media/article-mortgage-insurance-teaser-500x500.jpg","mortgage-insurance",[717,720,723,726,729],{"title":718,"content":719},"Understanding private mortgage insurance","::callout{title=\"What is mortgage insurance?  \" body=\"Mortgage insurance, AKA private mortgage insurance (PMI), is a monthly premium that lenders charge when you put less than 20% down on a conventional loan.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::\n\n### Private mortgage insurance (PMI) explained\n\nThe first thing you should know about mortgage insurance is that it doesn’t protect you—it’s designed to safeguard the lender from financial loss. When buying a home, and a lender lets you borrow more than 80% of the home’s purchase price, they want compensation for taking on more risk in case you can’t pay them back. This rule also applies to [refinancing](/refinancing/articles/rate-and-term/) if you have less than 20% equity in the home. Don’t confuse mortgage insurance with [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/), which has your back if your home or belongings get damaged.\n\nThe bright side of private mortgage insurance? You won’t have to pay it forever. By law, lenders must stop charging you for PMI once you’ve paid down your balance to 78% of the original loan amount, or when you get halfway through your loan’s term and are current on payments—whichever hits first.\n\n### Mortgage insurance premium (MIP) for FHA loans  \n\nIf a conventional loan isn’t for you, an [FHA loan](/home-loans/fha-loan/) can offer lenient credit requirements and down payments as low as 3.5%.  FHA loans come with a mortgage insurance premium (MIP) instead of PMI. Both MIP and PMI protect the lender in the event you default on your loan, but they operate differently. A mortgage insurance premium has two parts: a one-time upfront premium plus an annual payment.\n\n### Mortgage protection insurance (MPI): Optional coverage\n\nThere’s one more acronym that might throw you for a loop: MPI. Mortgage protection insurance (MPI) is an optional policy that will pay off your mortgage when you die, so your loved ones won’t have to carry the burden of an unpaid home loan. Note that if you have a good life insurance policy, you probably won’t need MPI.",{"title":721,"content":722},"Mortgage insurance costs by loan type","### PMI for conventional mortgages\n\nSo how much is mortgage insurance? It depends. PMI isn’t a flat fee—it’s usually 0.5% to 1.5% of the original loan amount annually. Most of the time, mortgage insurance is part of your monthly bill, with little to no required payment at closing.\n\nYour financial stats influence how much a lender decides to charge you for PMI: the riskier your profile, the higher percentage you’ll likely have to pay. Let’s walk through some factors lenders will consider. \n\n* **Down payment:** Even if you can’t afford 20%, a higher [down payment](/home-buying/articles/how-much-down-payment-for-a-house/) could shave down your PMI costs.\n* **Credit score:** A higher [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) shows you’re good at managing debts, which could get you a lower PMI rate.\n* **Mortgage amount:** Larger loans are saddled with higher PMI costs since the lender is taking on more risk.\n* **Mortgage type:** [Adjustable-rate loans](/home-loans/adjustable-rate/) are riskier than [fixed-rate loans](/home-loans/fixed-rate/), so they generally come with higher PMI costs.\n\n### MIP for FHA loans\n\nRemember, if you have an FHA loan, MIP comes in two forms: the upfront premium and the annual payment. The upfront premium is a one-time payment of 1.75% of your total loan. Usually this is paid upfront, but it can also be tacked onto your loan balance.\n\nYour annual MIP will be 0.45% to 1.05% of your loan balance, divided up over your monthly payments. If your down payment is less than 10%, you’ll be stuck with the annual premium for the entire loan term. Heads up: You usually can’t cancel MIP unless you refinance to a different type of loan.\n\n### USDA Guarantee fees\n\nIf you’re hoping to cozy up in the countryside, a [USDA loan](/home-loans/usda-loan/) requires zero down payment. You won’t pay mortgage insurance if the property is in an eligible USDA area, but you will owe an upfront guarantee fee and an annual fee. These fees essentially work as mortgage insurance for USDA loans, protecting lenders from default and keeping the program in action.\n\nThese fees can fluctuate yearly, but the law sets firm limits: the maximum upfront fee is 3.5% of the loan amount and the annual charge can’t exceed 0.50% of the unpaid principal balance.\n\n### VA funding fees\n\nIf you’re a veteran, an active service member or a surviving spouse, a [Veterans Affairs (VA) loan](/home-loans/va-loan/) might be your best no down payment option. Instead of PMI, you’ll owe a funding fee, which is a small percentage of the total loan, typically 1.25% to 3.30% of the loan amount. Even though a down payment isn’t required, you may want to bring some cash to the table: the higher your down payment, the lower your funding fee will be.",{"title":724,"content":725},"Strategies to avoid mortgage insurance","### Making a 20% down payment\n\nPutting down 20% is a surefire way to keep mortgage insurance at bay. Saving up 20% is no easy feat, so it’s important to weigh the pros and cons: do you want to get into a home now and start building equity, or would you rather keep saving to avoid the cost of mortgage insurance? If home prices are surging, mortgage insurance might be cheaper than waiting to buy.\n\n### Utilizing piggyback loans (80/10/10)\n\nA piggyback loan could help you avoid mortgage insurance if you have a 10% down payment. Also known as an 80/10/10, this involves two loans: one covering 80% of the home’s price and the other covering 10%. Proceed with caution here, as juggling two loans can end up costing more than PMI in interest and closing costs. Plus, it could be difficult to refinance a mortgage if you have a second mortgage.\n\n### Exploring government-backed loans\n\nTake a closer look at conventional loan alternatives like [FHA](/home-loans/fha-loan/), [VA](/home-loans/va-loan/) and [USDA](/home-loans/usda-loan/) loans, which can help make homeownership more affordable. See if you qualify for one of these [government-backed loans](/home-buying/articles/government-backed-home-loans/) so you can avoid paying PMI.\n\n### Considering lender-paid mortgage insurance (LPMI)\n\nYou can build the cost of your mortgage insurance into your mortgage rate with lender-paid mortgage insurance. You won’t be charged a monthly PMI payment, but you will pay a higher rate for the life of your loan. Your credit score and down payment are key components in determining the increase in your rate, so you’d need to do the math to determine the more affordable option: paying mortgage insurance or paying the higher rate.",{"title":727,"content":728},"How to remove mortgage insurance","### Automatic cancellation at 22% equity\n\nYour lender is legally required to cancel PMI once you reach 22% in home equity, or one month after your loan’s midpoint (say 15 years into a 30-year loan) and you are current on your payments. This doesn’t require action on your part, but there are more proactive ways to save. Note that this doesn’t apply to the mortgage insurance premium on FHA loans.\n\n### Requesting cancellation at 20% equity\n\nMark your calendar for the day you hit 20% equity in your home. That’s when you can write to your lender or loan servicer and request that mortgage insurance be taken off the bill. You’ll need to be current on your payments and have a healthy payment history to qualify for PMI cancellation.\n\n### Refinancing to eliminate MIP\n\nIf you have an FHA loan and want to say goodbye to mortgage insurance premiums for good, you may want to [refinance](/refinancing/) to a different [loan type](/home-loans/articles/types-of-loans/). You can test the refinance waters and run through different rate and term scenarios using our [Refinance Calculator](/calculators/refinance/).\n\n### Cancel PMI through home appreciation\n\nIf your home has appreciated in value due to market conditions or big renovations, you might have more home equity than you think. You can ask your lender for a new [appraisal](/home-buying/articles/home-appraisal/) of your home’s worth for a few hundred bucks. They’ll compare your remaining loan balance to the home’s appraised value to determine how much equity you have. Depending on how long you’ve been in the home, you may need to reach 25% equity to cancel PMI.",{"title":730,"content":731},"Comparing mortgage insurance options ","### PMI vs. MIP: Key differences\n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Private mortgage insurance (PMI)\"},{\"column\":\"Mortgage insurance premium (MIP)\"}]},{\"row\":[{\"column\":\"For conventional loans\"},{\"column\":\"For FHA loans only \"}]},{\"row\":[{\"column\":\"Only required with down payment of \u003C20%\"},{\"column\":\"Required for all FHA loans regardless of down payment size\"}]},{\"row\":[{\"column\":\"Monthly payments\"},{\"column\":\"Upfront premium and annual payment\"}]},{\"row\":[{\"column\":\"Can be cancelled at request once 20% equity is reached\"},{\"column\":\"Can’t be cancelled if you put less than 10% down\"}]},{\"row\":[{\"column\":\"Cost of PMI varies based on multiple factors\"},{\"column\":\"Cost of MIP is more standardized and less influenced by borrower’s financials \"}]},{\"row\":[{\"column\":\"Lower initial loan-related costs compared to MIP’s upfront premium\"},{\"column\":\"Qualifying is easier for borrowers with lower credit scores and smaller down payments\"}]}]'}\n::\n\n### Pros and cons of each option\n\n **Private mortgage protection insurance for conventional loans** \n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros of PMI\"},{\"column\":\"Cons of PMI\"}]},{\"row\":[{\"column\":\"Allows for down payment of \u003C20%\"},{\"column\":\"Increases monthly mortgage payment\"}]},{\"row\":[{\"column\":\"Helps first-timer buyers and those with limited savings qualify for a mortgage\"},{\"column\":\"Protects only the lender, not the buyer\"}]},{\"row\":[{\"column\":\"Allows buyers to purchase now and build equity instead of waiting to save\"},{\"column\":\"Adds to long-term loan costs without building equity directly\"}]},{\"row\":[{\"column\":\"Cancelled automatically once owner reaches 22% equity \"},{\"column\":\"Depending on lender, requesting PMI removal can be cumbersome \"}]}]'}\n::\n\n **Mortgage insurance premium for FHA loans** \n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros of MIP\"},{\"column\":\"Cons of MIP\"}]},{\"row\":[{\"column\":\"Allows for down payment as little as 3.5% and lower credit scores\"},{\"column\":\"Mandatory for FHA loans regardless of down payment size \"}]},{\"row\":[{\"column\":\"Helps first-time borrowers and those with lower income \"},{\"column\":\"Required for entire loan term if down payment is \u003C10%\"}]},{\"row\":[{\"column\":\"May be refinanced to a conventional loan to remove MIP \"},{\"column\":\"Upfront premium plus annual fee add to total cost of loan\"}]}]'}\n::","2025-06-12T14:15:00.000Z","Let’s start with the good news: it’s possible to buy a home with less than 20% down. The downside? When you have a [conventional loan](/home-loans/conventional-loan) and a smaller [down payment](/home-buying/articles/how-much-down-payment-for-a-house), lenders charge private mortgage insurance (PMI) to help them recover costs if you can’t make the payments. No one wants a bigger mortgage bill, so we’ll give you the rundown on mortgage insurance and explain how you can get around it.","What is mortgage insurance and when do you need it?",[736,688,482],"insurance",{"introText":738,"text":486,"to":487,"body":739},"Need help finding the right loan for you?","Citi can help you narrow down your options and determine which is more affordable in the long run.",{"title":741,"description":742},"Mortgage Insurance Costs & Types Explained | Mortgage.com","Learn about mortgage insurance, including PMI and MIP, their costs, and strategies to avoid or remove them. Make informed decisions for your home loan.","content:articles:home-buying:mortgage-insurance.json","Mortgage Insurance","articles/home-buying/mortgage-insurance.json",[699,530,747],{"label":748,"slug":736,"seo":749},"Insurance",{"description":750},"Learn more about insurance with helpful articles, tools, and guides to support your homeownership journey.",{"_path":752,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":753,"l1":482,"linkNav":754,"heroMedia":755,"teaserImage":758,"outro":7,"slug":760,"sections":761,"date":801,"subheadline":802,"headline":803,"isFeatured":6,"tags":804,"link":805,"seo":808,"hasSectionNavigation":27,"_id":811,"_type":78,"title":812,"_source":80,"_file":813,"_extension":78,"tagsDetails":814},"/articles/home-buying/10-questions-to-ask-a-realtor",7,{"introText":546,"text":486},{"landscape":756,"portrait":757},"/media/article-10-questions-to-ask-mobile-768x512.jpg","/media/article-10-questions-to-ask-desktop-520x638.jpg",{"src":759},"/media/article-10-questions-to-ask-teaser-500x500.jpg","10-questions-to-ask-when-buying-a-house",[762,765,768,771,774,777,780,783,786,789,792,795,798],{"title":763,"content":764},"Why it’s important to ask the right questions before you buy","Whether you’re [buying your very first home](/home-buying/articles/first-time-home-buyer/), looking for more space or ready to downsize, purchasing a home is a huge milestone. And for many, it’s one of the biggest financial decisions they’ll ever make. However, a surprising 82% of recent buyers say they have at least one regret. The most common one? Wishing they hadn’t taken on a home that needs more upkeep than they bargained for. If you want to sidestep that kind of frustration and feel confident about your investment, it all starts with asking a real estate professional some important questions before signing on the dotted line.",{"title":766,"content":767},"10 Must-ask questions when buying a home","Here are ten essential real estate questions you’ll want to ask as you move through the home buying process.",{"title":769,"content":770},"1.  Is the home in a high-risk natural disaster zone?","Earthquakes, tornadoes, floodplains––no thanks. A home's charm can be irresistible, but don't let the curb appeal blind you to potential risks. That idyllic farmhouse might be in tornado territory, and that beach house could be in hurricane alley. These risks aren’t just about safety; they can drive up insurance costs and impact your long-term budget. If you’re planning to stay long-term or pass the home down to future generations, make sure it’s built to handle whatever nature throws at it. Do your homework: look into historical data, assess structural resilience and secure the right [insurance](/home-buying/articles/what-is-homeowners-insurance/). Peace of mind starts with preparation—and ends (hopefully) under clear blue skies.",{"title":772,"content":773},"2. Are there any health or safety hazards (e.g., mold, asbestos)?","As you dream of crown molding, don’t forget the less appealing kind—toxic mold that lurks behind walls. Like lead paint and asbestos, these dangers can slip past untrained eyes. Sometimes, the owner can be completely unaware of hazards in their home, which is where the all-important [home inspection](/home-buying/articles/what-is-a-home-inspection) comes in. A must-do for anyone buying a new home, a home inspection can help reveal any hidden dangers that may lie beneath the surface.  \n\nBeyond wellness concerns, the cost of fixing safety hazards can be steep. For example, removing lead paint can set you back $8 to $15 per square foot, asbestos removal ranges from $1,200 to $3,000 and radon mitigation can cost upwards of $1,500. During inspection, make sure to ask about structural issues, pest infestations and contaminated water sources as well.",{"title":775,"content":776},"3. What’s the age and condition of the roof?","Your roof isn’t just a finishing touch—it protects you and your belongings from the elements. Since roof replacements can be a huge financial hit, you’ll want to inquire about its age and condition. Most roofs do the job for 25 years, give or take. Finding a newish roof on a home you love means less worry, added value and shelter from the storm. If the one you're eyeing is getting up there, decide if your budget can handle a replacement. Hint: We’re talking $15,000 to $30,000 on average for a brand-new roof.\n\nFor an extra layer of security, review seller disclosures and inspection reports for any red flags. Spotting issues early not only prevents future headaches—it gives you leverage when it’s time to [negotiating repairs](/home-buying/articles/how-to-negotiate-repairs-after-inspection) with the seller.",{"title":778,"content":779},"4. Are all major systems (HVAC, electrical, plumbing) in good condition? ","A good home inspector will give all major systems—heating, cooling, plumbing and electrical—a thorough exam on your behalf. These hidden heroes keep your home cozy, bright and humming along, turning basic structures into true sanctuaries. Breakdowns can also throw a wrench in your budget. For instance, an HVAC replacement can run you anywhere from $5,000 to $12,000 depending on the system and home, so it’s wise to have a thorough inspection of all major systems before you commit.\n\nAnd remember, spotting problems isn’t always a deal-breaker. It can give you the upper hand when it’s time to [make an offer](/home-buying/articles/how-to-make-an-offer). Doing your homework puts the control in your hands.",{"title":781,"content":782},"5. What is the monthly cost of utilities?","Your list of questions to ask a realtor may not include utility bills, but they should. Asking for a full year of utility bill history can give you a realistic picture of what you’ll be spending each month. This isn't just about budgeting; it's about assessing the home's efficiency and sustainability. Knowing how much power and water the home uses can help you plan smarter, save money and reduce your environmental impact.\n\nUtility costs can also reveal more than just monthly spend. High bills could point to outdated systems or poor insulation. Low bills can mean the owner made some valuable upgrades. This info is useful for shaping your budget, forecasting future maintenance and even informing an offer on the house.",{"title":784,"content":785},"6. Which appliances are included, and what’s their condition?","Don't let appliances fly under the radar. Is a modern fridge, stove, dishwasher, washer and dryer included? If not, replacing them can be pricey. A fancy fridge or new washer could each run you thousands, so ask [your realtor](/home-buying/articles/do-you-need-a-realtor-to-buy-a-house) for specifics. Refrigerators can run for about 14 years; stoves typically fire up for around 15. If they're nearing the end of their lifespan, you might need to budget for new ones.\n\nSafety comes into play here, too. Old gas stoves can leak if their seals are worn or their connections are faulty, posing serious health risks like carbon monoxide poisoning. Believe it or not, aging clothes dryers can become a fire hazard, all thanks to accumulated lint. Armed with this knowledge, you’ll be well-equipped to [negotiate your offer](/home-buying/articles/how-to-negotiate-repairs-after-inspection). Sellers may knock down the price or throw in a credit so you can pick out new appliances of your own.",{"title":787,"content":788},"7. Why is the seller moving?","Understanding the seller's \"why\" can be a major advantage. If they're in a hurry to sell because of a new job or family situation, they might be more open to a speedy transaction. This is your chance to present an offer that’s too good to pass up. If the property has been on the market for some time, the seller might be thrilled to negotiate. Alternatively, if the seller is trying to avoid foreclosure, they could be looking for a [short sale](/home-buying/articles/what-is-a-short-sale) where there are deals to be made—but make sure you’re working with an experienced realtor and be prepared for more hoops than a standard sale, too.",{"title":790,"content":791},"8. Were additions or renovations permitted and up to code?","Next up: home renovations. Make sure any updates were done legally, with proper permits and up to code. Well-executed renos—like a smart basement conversion—can add serious value and appeal.\n\nSome renovations may affect your property taxes. Done poorly, they can lead to costly issues down the line, like mold or structural damage. Whenever possible, find out who did the work. Licensed, experienced contractors are more likely to follow regulations. Always ask for details and check online reviews. If the renovations were recent, a home warranty might also be worth considering, as it could help cover systems or appliances affected by the updates.",{"title":793,"content":794},"9. How do local home prices compare?","Why worry about the price of other people’s property? Well, knowing what they paid can be your secret weapon in the house-hunting game. These local prices are usually referred to as [real estate comps](/home-buying/articles/real-estate-comps). They can help you figure out a fair offer, before an official [home appraisal](/home-buying/articles/home-appraisal), and provide an idea of how much the property might appreciate over time—one of ownership’s biggest advantages.\n\nThis detective work isn't just about the stats; it's about getting a sense of the neighborhood's vibe and overall economic health. Seeing how the home stacks up against others can really boost your confidence about making an offer.",{"title":796,"content":797},"10. How long has the home been on the market?","So, how long has this gem been on the market, eagerly awaiting its perfect match? This detail can reveal quite a bit. If it's been a while, you might have leverage to strike a sweeter deal. Maybe the price is a tad steep, or the home has a quirky charm that's not everyone's cup of tea.\n\nIf it just popped up on the market and checks off loads of boxes, you might need to act swiftly or craft an offer that really stands out. Either way, knowing how long the house has been listed gives you a peek into the seller's mindset, arming you with clues to plan your next move.",{"title":799,"content":800},"Use these questions to negotiate with confidence","The groundwork you lay now can lead you to the right home, reduce your stress and save you a pretty penny. You're well equipped for the house hunt now. Go out there and ace it.","2025-06-09T16:38:00.000Z","So, you’re buying a house and you’re bursting with questions. Perfect! Jump into this quest with all the curiosity of a good detective. Investigate the area, scrutinize the property and [partner with a realtor](/home-buying/articles/what-is-a-real-estate-agent) who really knows their stuff, and can answer all your questions.","10 Essential questions to ask a real estate agent",[688,689,482],{"introText":806,"text":486,"to":487,"body":807},"Ready to make an offer?","We'll be right by your side.",{"title":809,"description":810},"10 Essential Questions To Ask When Buying A House","Learn key questions to ask when buying a house to make a smart investment. Get insights on inspections, neighborhoods, and more for a confident purchase.","content:articles:home-buying:10-questions-to-ask-a-realtor.json","10 Questions To Ask A Realtor","articles/home-buying/10-questions-to-ask-a-realtor.json",[699,703,530],{"_path":816,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":483,"l1":482,"linkNav":817,"heroMedia":818,"teaserImage":821,"slug":823,"disclosure":99,"sections":824,"date":843,"subheadline":844,"headline":845,"dateModified":846,"isFeatured":6,"tags":847,"link":849,"seo":852,"hasSectionNavigation":27,"_id":855,"_type":78,"title":856,"_source":80,"_file":857,"_extension":78,"tagsDetails":858},"/articles/home-buying/are-property-taxes-included-in-mortgage-payment",{"introText":546,"text":486,"to":487},{"landscape":819,"portrait":820},"/media/article-property-taxes-mobile-768x512.jpg","/media/article-property-taxes-desktop-520x638.jpg",{"src":822},"/media/article-property-taxes-teaser-500x500.jpg","are-property-taxes-included-in-mortgage-payment",[825,828,831,834,837,840],{"title":826,"content":827},"What are property taxes?","When you become a homeowner, you start paying fees to your state and local governments. These property taxes fund essential services that help your community thrive, such as maintaining schools, roads and public safety. The amount you pay in property taxes can vary greatly from state to state, and even county by county. To put things in perspective, in 2023, Hawaii had the lowest tax rate of 0.32% and Illinois had the highest of 1.83%. Quite the range, right?\n\n### **How property taxes are calculated**\n\nProperty taxes aren’t a flat fee; they are determined based on your home’s value and the tax rates where you live. After assessing your property value and baseline tax rates in the area, the local government will assign a tax rate to your home. You can use our [mortgage calculator](/calculators/monthly/) and property tax estimate to get a feel for your monthly mortgage breakdown. Keep in mind, rates can vary each year due to local tax assessments and any changes in your property’s value.\n\n::callout{title=\"Property taxes in action\" body=\"If your home is valued at $300,000 and the tax rate is 1.5%, your annual property tax would net out at $4,500. Don’t forget that property tax rates vary based on where you live.\" image=\"\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::\n\n### **Annual vs. monthly property tax payments**\n\nDo you pay property taxes monthly? That depends on how you choose to pay. You\ncan either take care of property taxes in one lump sum each year or as part of\nyour mortgage payment. For many folks, monthly payments are more manageable and easier to budget.",{"title":829,"content":830},"Are property taxes included in your mortgage?","A lender may include property taxes in your monthly mortgage payment. These taxes are typically pulled from an escrow account, also known as a mortgage impound account, which funds many [closing costs](/home-buying/articles/closing-costs/). In other cases, you may have the option to pay property taxes directly to the local government. We’ll get into both possibilities.\n\n### **What is an escrow account?**\n\nIf you’ve tuned into a real estate show or two, you’re familiar with the phrase “in escrow.” But what does it mean? A property is in [escrow](/home-buying/articles/what-is-escrow/) once the seller accepts the buyer’s offer. At that point, a third party agent sets up and manages an escrow account to handle funds (like your [earnest money](/home-buying/articles/what-is-earnest-money/) deposit) and important documents until all conditions of the sale are met.\n\nThis process ensures that the buyer and seller check every box before the property officially changes hands. Not all lenders and loan programs require an escrow account, but some make it mandatory. Once you seal the deal, your mortgage servicer can use the escrow account to cover other fees.  \n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"If you’re financially savvy and your lender doesn’t require an escrow account, you may choose a “DIY” solution. Instead of using an escrow account, you can set up your own interest-earning account to hold your property tax and homeowners insurance funds.\"}\n::\n\n### **When property taxes are rolled into your mortgage**\n\nProperty taxes are often rolled into your mortgage through an escrow account. If you have a conventional mortgage, most lenders require an escrow account, especially if your down payment is less than 20%. Many [government-backed loans](/home-buying/articles/government-backed-home-loans/) also require escrow accounts, including [FHA](/home-loans/fha-loan/), [VA](/home-loans/va-loan/) and [USDA](/home-loans/usda-loan/) loans. This ensures that your taxes and insurance bill are paid on time and in full.\n\n### **How lenders use escrow to pay taxes**\n\nWhat about escrow and property taxes? Your mortgage servicer can use your escrow account to cover fees like property taxes and [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/) on your behalf. When you have an escrow account, your monthly mortgage bill is divvied up three ways: some goes to the principal, some covers the interest and some is put into escrow. Think of escrow as a dedicated piggy bank, designed to ensure important bills are paid on time.\n\nYour lender will usually estimate your annual property tax and homeowners insurance costs, then divide it by 12 to determine the monthly amount. This cost is added to your principal and interest fees, resulting in a single, predictable mortgage payment each month.",{"title":832,"content":833},"Why did my mortgage payment go up?","If you look at your mortgage bill and wonder “Why did my mortgage go up?,” a few\nfactors could be at play. \n\n### **Property tax reassessment**\n\nLocal governments periodically reassess property values. Sometimes, your home value increases due to market conditions or home improvements, pulling your property taxes higher.      \n\n### **Escrow shortage or recalculation**\n\nEach year, your lender performs an escrow analysis to ensure there’s enough money in the account to cover your bases. If there’s a shortage, your monthly payment will increase to make up the difference. \n\n### **When taxes increase after home purchase**\n\nIn some cases, property taxes increase after you buy a home, especially if the previous owner was eligible for a tax exemption. As a result, you may owe a higher mortgage payment.",{"title":835,"content":836},"How to check if your taxes are included","Not sure if you’re taxes are folded into your mortgage payments? We’ll help you investigate. \n\n### **Look at your monthly mortgage statement**\n\nYour monthly statement should have a line item for escrow. If you see a breakdown that includes taxes, then they are indeed included in your payment.\n\n### **Ask your lender about escrow**\n\nDon’t be shy, give your lender or mortgage servicer a call. They can offer a detailed breakdown of your mortgage payment and confirm whether taxes are included.\n\n### **Check your closing disclosure or loan estimate**\n\nHopefully, you’ve kept your [closing disclosure](/home-buying/articles/closing-disclosure/) safe and sound. It’s an important document for your records and should clearly state whether property taxes are part of the mortgage.",{"title":838,"content":839},"Can you pay property taxes separately?","### **Loans without escrow accounts**\n\nMost lenders prefer to handle property taxes through an escrow account, though you may have the option to pay your local tax authority directly.\n\n### **Pros and cons of paying taxes directly**\n\nSome loans (usually those with higher down payments) may not require an escrow account. In these cases, the homeowner is responsible for paying property taxes directly to the local government.\n\n**Comparing ways to pay property taxes**\n\n::inline-table{tableLayout=\"waffle\" :headers='[{\"value\":\"Feature\"},{\"value\":\"Paying with escrow\"},{\"value\":\"Paying taxes directly\"}]' :rows='[{\"column\":{\"valueOne\":\"Convenience \",\"valueTwo\":\"Automatically handled by mortgage servicer\",\"valueThree\":\"You are responsible for making tax payments on time and in full \"}},{\"column\":{\"valueOne\":\"Financial flexibility\",\"valueTwo\":\"Payments are fixed and automatically included in your monthly payment\",\"valueThree\":\"Depending on your location, you may be able to control when to submit payments and choose to pay in one annual lump sum or more frequently.\"}},{\"column\":{\"valueOne\":\"Risk of late payments\",\"valueTwo\":\"Mortgage servicer handles timely payments, reducing risk of penalties or liens for late bills\",\"valueThree\":\"Failure to pay on time can result in penalties, additional interest or even a tax lien \"}},{\"column\":{\"valueOne\":\"Escrow fees \",\"valueTwo\":\"Servicers may charge fees for managing the escrow account\",\"valueThree\":\"No additional fees for managing your own payments\"}}]'}\n::\n\n### **When you might opt out of escrow**\n\nDo you prefer to hold the purse strings? If you have a larger down payment and get the okay from your lender, you may be able to pay property taxes directly to the government. Before deciding to forgo an escrow account, be sure to consider the pros and cons. Managing these payments yourself adds more financial responsibility to your plate, but it also gives you more control over your cash flow.",{"title":841,"hideTitle":27,"content":842},"FAQs: Property taxes and your mortgage","\n\n::faq{headline=\"FAQs: Property taxes and your mortgage\" :faqs='[{\"question\":\"Do property taxes change every year?\",\"answer\":\"Yes, property taxes may change every year as local governments reassess their tax policies and your property value.\"},{\"question\":\"Can I remove escrow from my mortgage?\",\"answer\":\"In some cases, you can request to remove escrow from your mortgage, especially if you have built up equity in your home. However, your lender may have specific requirements or fees for this process.\"},{\"question\":\"Why is my mortgage higher than expected?\",\"answer\":\"If your mortgage payment is higher than you expected, it could be due to an increase in property taxes, insurance premiums or an escrow shortage. If you’re worried about any changes, reach out to your lender to have your mortgage payment increase explained in detail.\"}]'}\n::","2025-05-20T11:15:00.000Z","From purchase price to closing costs, lots of fees come with a new home. But you might wonder how property taxes factor into those fees; are property taxes included in a mortgage payment? Let’s break down what property taxes are, how they work and what they mean for your path to homeownership.","Are property taxes included in your mortgage payment?","2026-01-08T05:40:00.000Z",[848,688,482],"financial-planning",{"introText":850,"body":851,"text":486,"to":487},"Want a closer look at property taxes? ","We can help you understand the role property taxes play in your mortgage.",{"title":853,"description":854},"Are Property Taxes Included in a Mortgage Payment?","Wondering if property taxes are part of your mortgage payment? Learn how taxes, escrow, and rising rates can affect what you owe each month.","content:articles:home-buying:are-property-taxes-included-in-mortgage-payment.json","Are Property Taxes Included In Mortgage Payment","articles/home-buying/are-property-taxes-included-in-mortgage-payment.json",[699,859,530],{"label":860,"slug":848,"seo":861},"Financial Planning",{"description":862},"Learn more about financial planning with helpful articles, tools, and guides to support your homeownership journey.",{"_path":864,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":483,"l1":482,"linkNav":865,"heroMedia":866,"teaserImage":869,"slug":871,"disclosure":99,"sections":872,"date":888,"subheadline":889,"headline":890,"isFeatured":6,"tags":891,"link":892,"seo":895,"hasSectionNavigation":27,"_id":898,"_type":78,"title":899,"_source":80,"_file":900,"_extension":78,"tagsDetails":901},"/articles/home-buying/home-warranty-vs-home-insurance",{"introText":546,"text":486,"to":487},{"landscape":867,"portrait":868},"/media/article-home-warranty-home-insurance-mobile-768x512.jpg","/media/article-home-warranty-home-insurance-desktop-520x638.jpg",{"src":870},"/media/article-home-warranty-home-insurance-teaser-500x500.jpg","home-warranty-vs-home-insurance",[873,876,879,882,885],{"title":874,"content":875},"What is a home warranty?","Simply put, it’s a home protection plan for the essential items that keep your home running—like your HVAC, water heater, fridge and more. When one of these appliances or systems breaks down because of normal wear and tear, a home warranty covers its [repair](/home-buying/articles/how-to-negotiate-repairs-after-inspection/) or replacement.\n\n### How does a home warranty work? \n\nThe first step is securing the right warranty for you and your budget. You can typically choose coverage for just appliances, just systems or a combination of both, so choose the option that makes sense for your needs.    \n\nThen, if something does break down, simply contact your provider to file a claim. The home warranty company will send a technician to your home to assess the issue and either repair or replace the item.  \n\nFinally, it’s important to remember that there is generally a service fee (even if the repair or replacement is covered). This can range from $75–$125, depending on your provider and the specifics of your coverage.  \n\n### What does a home warranty cover? \n\nYour home’s appliances and systems won’t last forever, but a home warranty helps cover items you use the most. Let’s look at what’s usually covered—and what isn’t. \n\n* **Appliances:** Refrigerators, ovens, dishwashers, washers and dryers. \n* **Systems:** HVAC, plumbing, electrical. \n* **Exclusions:** Pre-existing conditions, improper maintenance, neglect. \n\n### How much does a home warranty cost?\n\nA home warranty isn’t one-size-fits-all. Its cost depends on how much protection you want. On average, you’ll spend anywhere from $220 to $1,880 a year, with service call fees running between $75 and $125 per visit. The final price depends on things like your home’s location, [its condition](/home-buying/articles/what-is-a-home-inspection/) and, of course, how much coverage you need.\n\n::quote{icon=\"\" quote=\"Your home’s appliances and systems won’t last forever, but a home warranty helps cover items you use the most.\"}\n::",{"title":877,"content":878},"What is home insurance?","Home insurance acts as a safety net for your home, covering damage to your house and belongings, as well as protecting you if someone gets hurt on your property. It’s not just a smart choice—it’s a must-have if you’ve got a mortgage. Lenders require a home insurance policy to protect you (and them) in case disaster strikes.  \n\n### How does home insurance work? \n\nDifferent policies cover different types of homes, but, in general, they all cover incidents like fires, windstorms and theft. That being said, a number of factors impact your coverage, including location, the value of your home and belongings, the size and condition of your home and the deductible—which is the amount you pay out of pocket before the insurance company begins paying.  \n\nFor example, with a $2,000 deductible and a $20,000 covered loss, you pay $2,000 and the insurance company covers the remaining $18,000. So, while higher deductibles can lower premiums, they also increase out-of-pocket costs. Other factors that influence the total amount paid out by your insurance company include coverage limits and the specific damage covered by the policy.  \n\n::tip{icon=\"Bulb\" text=\"Boost your home’s defenses for greater savings. Installing a security system, storm shutters or impact-resistant roofing can lower premiums and add protection.\" title=\"PRO TIP\"}\n::\n\nWhat does home insurance cover? \n\nBefore you sign your policy, it’s important to understand what your policy covers.  \n\n* **Dwelling coverage:** Protects the structure of your home from disasters like fire, windstorms and vandalism. \n* **Personal property:** Covers your belongings if they are damaged or stolen due to covered events such as fire, theft or storms. \n* **Liability protection:** Helps pay for legal fees if someone is injured on your property. \n* **Exclusions:** Does not cover appliance breakdowns, wear and tear or neglect. \n\n### How much does home insurance cost? \n\nWhile the average cost nationally is $1,400 per year, insurance prices can vary significantly depending on several factors, including:  \n\n* **Home value and replacement cost:** The cost to rebuild your home if it is damaged. \n* **Location and risk factors**: Whether your home is in areas prone to floods, wildfires or other natural disasters. \n* **Deductible selection:** Choosing a higher deductible can lower your premiums. \n* **Claims history and credit score**: Your past claims and credit score can affect your insurance rates.",{"title":880,"content":881},"Home warranty vs. home insurance ","::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Coverage Type\"},{\"value\":\"Home Warranty\"},{\"value\":\"Home Insurance\"}]' :rows='[{\"column\":{\"valueOne\":\"Appliances and Systems\",\"valueTwo\":\"Covers repairs and replacements of appliances and systems (HVAC, water heater, refrigerator, etc.) \",\"valueThree\":\"Does not cover appliances or systems \"}},{\"column\":{\"valueOne\":\"Structural Damage\",\"valueTwo\":\"Does not cover structural damage\",\"valueThree\":\"Covers structural damage (fire, hail, theft, vandalism, etc.)\"}},{\"column\":{\"valueOne\":\"Personal Possessions\",\"valueTwo\":\"Does not cover personal possessions\",\"valueThree\":\"May cover personal possessions\"}},{\"column\":{\"valueOne\":\"Liability\",\"valueTwo\":\"Does not provide liability coverage\",\"valueThree\":\"Provides liability coverage for injuries on the property\"}},{\"column\":{\"valueOne\":\"Natural Disasters\",\"valueTwo\":\"May cover some natural disasters but often requires additional coverage\",\"valueThree\":\"Covers natural disasters like fire, hail, lightning, tornado; additional coverage needed for floods and earthquakes\"}},{\"column\":{\"valueOne\":\"Deductibles\",\"valueTwo\":\"Typically covers full cost of repair or replacement, with a service call fee\",\"valueThree\":\"Requires a deductible before coverage kicks in\"}},{\"column\":{\"valueOne\":\"Service Providers\",\"valueTwo\":\"Works with specific repair businesses\",\"valueThree\":\"You can choose your own service providers\"}}]'}\n::\n\n### Coverage differences \n\nYou can remember the differences in home protection coverage like this: a home warranty covers everyday appliances and systems like HVAC units, water heaters and fridges, while home insurance steps in for bigger disasters like fires, storms, theft and even liability if someone gets hurt on your property. \n\n### Cost differences \n\nGiven the nature of its coverage, a home warranty generally costs less per year. However, you will have to pay a service fee for each claim. Home insurance, in contrast, comes with a higher premium and a deductible when you file a claim.  \n\n::tip{icon=\"Bulb\" text=\"Save with annual payments. Some providers offer discounts if you pay for the year up front instead of opting for monthly installments.\" title=\"Pro Tip\"}\n::\n\n### When do you need both? \n\nWhether you’re designing your dream home or [reviving](/home-buying/) a charming fixer-upper, having both a home warranty and home insurance makes good sense. Owners of new homes get peace of mind with full protection on their investment, while owners of older homes safeguard against aging systems, worn-out appliances and unexpected disasters.",{"title":883,"content":884},"Pros and cons of home warranties & home insurance","Before you commit, make sure you understand all the advantages and disadvantages of home insurance and a home warranty.  \n\n### Home warranty pros & cons \n\n*  Covers unexpected appliance and system breakdowns\n* Saves money on unexpected repair costs\n* Service fees apply per claim \n* Not all repairs are covered (exclusions apply) \n\n### Home insurance pros & cons \n\n* Covers home damage, personal belongings and liability \n* Mortgage lenders require it for home loans \n* Higher premiums than home warranties \n* Deductibles must be met before coverage applies",{"title":886,"hideTitle":27,"content":887},"FAQs – Home warranty vs. home insurance","\n\n::faq{headline=\"FAQs – Home warranty vs. home insurance\" :faqs='[{\"question\":\"Do I need both a home warranty and home insurance?\",\"answer\":\"No, you don’t have to have both home insurance and a home warranty. But they are a powerful combination. While home insurance protects against disasters like fires and theft, a home warranty saves you from costly repairs when appliances or systems break down. Together, they give your home complete protection and keep surprises from draining your bank account.\"},{\"question\":\"Does home insurance cover appliance breakdowns?\",\"answer\":\"No, it does not. But a home warranty can keep you covered if your appliances are on the fritz.\"},{\"question\":\"Can I purchase a home warranty at any time?\",\"answer\":\"Yes, you can purchase a home warranty at any time. However, many providers won’t offer coverage until 30 days after signing the contract.\"},{\"question\":\"What happens If my home warranty claim is denied?\",\"answer\":\"If your home warranty claim is denied, you’ll most likely have to cover the cost of any repairs or replacements yourself.\"},{\"question\":\"How do I choose the best home warranty plan?\",\"answer\":\"To pick the best home warranty plan, start by looking at your appliances and systems. If they’re getting older, coverage can save you big by repairing or replacing costly appliances and systems at a fraction of the price. Compare different plans based on what they cover, service fees and any exclusions. Choose between appliance, system or combo plans, and check if you can add extras like pool or hot tub coverage. And always make sure the plan fits your budget and delivers real value when things break down.\"}]'}\n::","2025-04-17T07:24:00.000Z","Wondering how a home warranty differs from home insurance? Take a seat. While both provide protection, they do so in distinct manners. A home warranty takes care of fixing or replacing significant appliances and home systems, whereas home insurance protects your house's structure and personal items from unforeseen events. There's a lot to explore, so let’s delve deeper into the details.","What’s the difference between a home warranty and home insurance?",[736,688,482],{"introText":893,"body":894,"text":486,"to":487},"Still have questions about home warranties or home insurance?","A mortgage specialist can help answer them.",{"title":896,"description":897},"Home Warranty & Home Insurance Compared | Mortgage.com","Confused about home warranty vs. home insurance? Learn the key differences, coverage details, and costs to make an informed choice for your home.","content:articles:home-buying:home-warranty-vs-home-insurance.json","Home Warranty Vs Home Insurance","articles/home-buying/home-warranty-vs-home-insurance.json",[699,530,747],{"_path":903,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":483,"l1":482,"linkNav":904,"heroMedia":905,"teaserImage":908,"slug":910,"disclosure":99,"sections":911,"date":936,"subheadline":937,"headline":938,"isFeatured":6,"tags":939,"link":940,"seo":943,"hasSectionNavigation":27,"_id":946,"_type":78,"title":947,"_source":80,"_file":948,"_extension":78,"tagsDetails":949},"/articles/home-buying/title-insurance",{"introText":546,"text":486,"to":487},{"landscape":906,"portrait":907},"/media/what-is-title-insurance-mobile-768x512.jpg","/media/what-is-title-insurance-desktop-520x638.jpg",{"src":909},"/media/what-is-title-insurance-teaser-500x500.jpg","title-insurance",[912,915,918,921,924,927,930,933],{"title":913,"content":914},"Definition of title insurance","\nWhat is home title insurance? It’sa policy that protects lenders and homeowners from financial costs if property rights are challenged due to past issues like public record errors or fraudulent documents. Don’t confuse it with the equally important [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/), which covers future damages to the property.",{"title":916,"content":917},"Importance of title insurance","\nProperty title insurance is an essential piece of the [underwriting process](/home-buying/articles/what-is-mortgage-underwriting/) and the homeownership paper trail, protecting your claim on the property. If there are errors or fraudulent documents lurking in the archives, they can pose serious risks to the latest owners. Individuals or agencies can challenge your ownership if there are undiscovered liens, fraudulent paperwork or conflicting property claims.  \n\n\n::callout{title=\"Title insurance in action\" body=\"Let’s say you discover a lien on your home because the previous owner didn’t pay off their mortgage, or a mysterious heir contests your property claims. Title insurance can offer protection in many situations, reducing the financial burden of defending your property rights.\" :media='{\"landscape\":\"/media/gettyimages-174764619.png\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":919,"content":920},"Types of title insurance","There are two types of title insurance: one that protects the lender and one that protects the owner. Keep in mind that these are separate policies and not a two-for-one special.  \n\n### Owner’s title insurance \n\nThis protects the keys to your castle against ownership claims, unknown liens or legal disputes. While this coverage isn’t necessarily required, it’s highly recommended to ensure your peace of mind and financial security. Wondering who pays for owner’s title insurance? Typically, it’s the buyer’s responsibility during [closing costs.](/home-buying/articles/closing-costs/) \n\n::tip{icon=\"Bulb\" :text='\"\\nWhen [negotiating terms of the sale](/home-buying/articles/how-to-make-an-offer/), the buyer and seller can come to an agreement that requires the seller to cover title insurance. When you’re talking terms, this option can help you trim the fat off closing costs.\"' title=\"Pro Tip\"}\n::\n\n### Lender’s title insurance \n\nThe lender also wants to protect their interest in the property when you assume the loan, ensuring the mortgage is valid. Most mortgage lenders require this coverage as a condition of every [home loan](/home-loans/), making it a standard part of the real estate transaction. Depending on the circumstances, the cost of lender’s title insurance can fall on the home buyer or the lender.",{"title":922,"content":923},"Common title issues covered","* **Errors in public records** like misspelled names or incorrect legal descriptions \n* **Unknown liens** from unpaid debts by former owners \n* **Forgery or fraud** in title documents \n* **Undisclosed heirs** claiming ownership \n* **Boundary disputes** with neighbors",{"title":925,"content":926},"Cost of title insurance","Title insurance is usually a one-time premium payment made at closing, not part of monthly [mortgage payments](/calculators/monthly/). According to Fannie Mae, the average cost is 0.42% of the purchase price, varying by state. This one-time fee defends your ownership for as long as you own the property.\n\n::did-you-know{title=\"Did you know that title insurance typically costs: \" :stats='[{\"value\":\"0.5%–1.0%\",\"label\":\"of home purchase price\"}]'}\n::",{"title":928,"content":929},"How to obtain title insurance","You know you need title insurance, but how do you lock it down? Luckily, it’s a fairly easy step in [the closing document process](/home-buying/articles/closing-documents/).  \n\n* **Step 1:** **Choose a reputable title insurance company.** Do your research and pick a company with a reputation for keeping homeowners happy. \n* **Step 2:** **The company performs a title search to detect issues.** This top-to-bottom deep dive helps identify potential problems with the title before the policy is issued.  \n* **Step 3:** **The policy is issued once you** [close on the home](/home-buying/articles/closing-on-a-house/)**.** After the title search is complete and any issues are resolved, the policy takes effect.",{"title":931,"content":932}," Choosing a title insurance provider","Need help finding a title insurance company? Don’t sweat it. \n\n::content-table{:tableData='[{\"row\":[{\"column\":\"FACTORS TO CONSIDER\"},{\"column\":\"TOP NATIONAL PROVIDERS\"}]},{\"row\":[{\"column\":\"Company reputation\"},{\"column\":\"First American Title\"}]},{\"row\":[{\"column\":\"Pricing\"},{\"column\":\"Fidelity National Title\"}]},{\"row\":[{\"column\":\"Customer service\"},{\"column\":\"Old Republic Title\"}]},{\"row\":[{\"column\":\"Lender recommendations\"},{}]}]'}\n::",{"title":934,"hideTitle":27,"content":935},"Title insurance FAQs","\n\n::faq{headline=\"Title insurance FAQs\" :faqs='[{\"question\":\"What is home title insurance and why do I need it?\",\"answer\":\"Home title insurance acts as your financial shield against legal disputes over property ownership. It ensures that you’re the rightful owner of the property and helps clean up messes that can bubble up from past ownership issues like paperwork errors, liens or fraudulent documentation. \"},{\"question\":\"What does home title insurance cover?\",\"answer\":\"Home title insurance typically covers you for issues like title defects, forged documents, undisclosed heirs and legal fees associated with defending your ownership rights. \"},{\"question\":\"How much does home title insurance cost?\",\"answer\":\"Title insurance is a one-time payment made at closing, usually ranging from 0.5% to 1.0% of the home's purchase price. According to Fannie Mae, the average cost is about 0.42% of the home's value. The exact amount will vary based on the property's value and location.\"},{\"question\":\"Who pays for title insurance, the buyer or the seller?\",\"answer\":\"The responsibility to pay for title insurance can vary depending on state laws and terms of sale. In some states, the seller is required to cover the cost, while in others, it’s the buyer's responsibility. This can also be negotiated as part of the purchase agreement, so it’s important to explore all your options and understand the specific requirements in your area.\"},{\"question\":\"What is the difference between owner’s and lender’s title insurance?\",\"answer\":\"Owner’s title insurance shields the home buyer from ownership disputes, while lender’s title insurance safeguards the mortgage lender’s interest in the property. These are different policies and would only provide payouts to the respective policyholder, either the owner or the lender.\"}]'}\n::","2025-04-16T13:55:00.000Z","A home isn’t just where you hang your hat; it’s a huge financial investment that needs protection. Home title insurance is part of the [closing process](/home-buying/articles/closing-on-a-house/) ensuring you have an undisputed claim on your house. It shields mortgage lenders and homeowners from losses if property ownership comes into question. We’ll go over why it matters and how title insurance helps you mark your territory during the [home-buying process](/home-buying/).","What is title insurance?",[736,688,482],{"introText":941,"body":942,"text":486,"to":487},"Need some clarity on title insurance?","We can help you get the answers you need.",{"title":944,"description":945},"What Is Home Title Insurance?","Protect your home investment with title insurance. Learn what home title insurance is, its costs, and who pays for it.","content:articles:home-buying:title-insurance.json","Title Insurance","articles/home-buying/title-insurance.json",[699,530,747],{"_path":951,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":601,"l1":482,"linkNav":952,"heroMedia":954,"teaserImage":957,"slug":959,"disclosure":99,"sections":960,"date":982,"subheadline":983,"headline":984,"isFeatured":6,"tags":985,"link":986,"seo":989,"hasSectionNavigation":27,"_id":992,"_type":78,"title":993,"_source":80,"_file":994,"_extension":78,"tagsDetails":995},"/articles/home-buying/what-is-mortgage-protection-insurance",{"introText":546,"text":486,"to":487,"ariaLabel":953},"N/A",{"landscape":955,"portrait":956},"/media/article-what-is-mpi-mobile-768x512.jpg","/media/article-what-is-mpi-desktop-520x638.jpg",{"src":958},"/media/article-what-is-mpi-teaser-500x500.jpg","what-is-mortgage-protection-insurance",[961,964,967,970,973,976,979],{"title":962,"hideTitle":6,"content":963},"Understanding mortgage protection insurance","A mortgage comes with a laundry list of insurance policies to consider, so let’s examine exactly what mortgage protection is and what it can do for you. If you’re feeling a little lost in the mortgage world, dip a toe into our [beginner's guide to loan basics](/home-loans/articles/what-is-a-mortgage/).\n\n### Definition and purpose\n\nWhat is mortgage protection insurance (MPI)? MPI is a type of policy designed to help with the mortgage payments if you pass away, become disabled or lose your job. Think of it as mortgage payment protection, providing peace of mind as a homeowner and financial security for your family if the unexpected happens.\n\n**Who does it benefit?**\n\n**You:** If you become disabled or lose your job, MPI can help cover your mortgage payments, providing financial security during tough times. \n\n**Your family:** MPI helps pay the mortgage if you pass away, allowing your family to stay in your home without additional financial burdens.  \n\n### How it differs from other insurance types\n\nFrom [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/) to [title insurance](/home-buying/articles/title-insurance), it’s easy to mix up the different types of financial protection—especially when MPI is sometimes called“life insurance for mortgages.” Let’s clear things up by taking a closer look at three often confused types: MPI, [private mortgage insurance (PMI)](/home-buying/articles/mortgage-insurance/) and life insurance.  \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Insurance type\"},{\"value\":\"Is it required?\"},{\"value\":\"How does it work?\"}]' :rows='[{\"column\":{\"valueOne\":\"Mortgage protection insurance (MPI)\",\"valueTwo\":\"No, voluntary insurance to protect homeowner and loved ones\",\"valueThree\":\"Helps with mortgage payments if homeowner dies, becomes disabled or loses employment\"}},{\"column\":{\"valueOne\":\"Private mortgage insurance (PMI)\",\"valueTwo\":\"Yes, typically required to protect lenders if down payment is less than 20%\",\"valueThree\":\"Protects the lender if homeowner defaults on the mortgage\"}},{\"column\":{\"valueOne\":\"Life insurance\",\"valueTwo\":\"No, voluntary insurance to protect loved ones\",\"valueThree\":\"Pays a lump sum to beneficiaries that can be used for anything, including the mortgage\"}}]'}\n::",{"title":965,"content":966},"Types of mortgage protection insurance","Let’s break it down even further into the two distinct types of MPI, which differ in structure and cost.\n\n### Level-term insurance\n\nThis option provides a fixed amount of coverage for a specified period, typically the length of your mortgage. The premium remains steady throughout the term, making household budgeting easier. If you want consistent coverage and predictable costs, level-term insurance might be for you.\n\n### Decreasing-term insurance\n\nThis type of MPI offers coverage that decreases over time, usually in lockstep with your mortgage balance. The premium stays the same, but the coverage amount decreases as you pay down your mortgage. This type of policy can cost less than level-term insurance and is a good fit for those who want mortgage support if they pass away.\n\n::tip{icon=\"Bulb\" title=\"Pro TIp\" text=\"Juggling your mortgage costs can feel like a full-time job. Cut out some of the hassle by using your escrow account to pay your insurance premiums automatically. At least that’s one thing you can set and forget.\"}\n::",{"title":968,"content":969},"Benefits of mortgage protection insurance","Let’s dive deeper into how home loan protection helps you and the people you love. \n\n### Financial security for your family\n\nIf you pass away, mortgage protection helps your loved ones cover the mortgage bills, which takes at least one burden off their shoulders. Even when you aren’t around, MPI can ensure your home remains a safe, stable environment for your loved ones.\n\n### Peace of mind for homeowners\n\nYou have enough to worry about on a daily basis; knowing you have mortgage security insurance can reduce your stress and anxiety. It provides a sense of security, allowing you to focus on your family and your financial health without fixating on the “what ifs.”",{"title":971,"content":972},"Costs associated with mortgage protection insurance","Home loan insurance isn’t one-size-fits-all. Several factors will determine your premium price tag.   \n\nFactors influencing premiums \n\n* **Age and health:** Younger folks in good health tend to pay lower premiums. \n* **Coverage amount:** The bigger [the mortgage](/calculators/monthly/), the higher the premium. \n* **Policy term:** Longer policy terms typically mean higher premiums. \n* **Type of policy:** Level-term insurance usually has higher premiums than decreasing-term insurance.\n\n::callout{title=\"Average cost estimates in action\" :body='\"\\nOn average, you can expect to pay between $20 and $50 per month on a policy that covers a $200,000 mortgage.\"' :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":974,"content":975},"How to choose the right policy","As always, the policy you choose depends on your personal needs and financial circumstances.\n\n### Assessing your financial situation \n\nTake a look at your income, expenses and current insurance policies. Next, determine how much coverage you need and whether a level-term or decreasing-term is the better choice for you. Consulting a financial advisor can help you make the most informed decision. \n\n### Comparing different providers \n\n* **Research providers:** Look for reputable insurance companies with solid reviews. \n* **Compare quotes:** Get quotes from multiple providers to find the best rate. \n* **Read the fine print:** Familiarize yourself with the terms and conditions of the policy, including any exclusions or limitations.",{"title":977,"content":978},"Common myths and misconceptions","Let’s clear up common points of confusion. \n\n### Mortgage protection vs. private mortgage insurance (PMI) \n\nMortgage insurance vs. MPI is a common topic in the home loan arena. To recap, mortgage protection insurance is optional coverage that helps with mortgage payments in the face of death, disability or unemployment. In contrast, private mortgage insurance can be required by lenders if you put down less than 20%, and it only protects the lender (not homeowners) if you default.   \n\n### Necessity for all homeowners \n\nSome people believe that MPI is necessary only for those with young families or high-risk jobs. The truth is, MPI is a good idea for any homeowner who wants mortgage support in the event of unforeseen financial hardships. It helps protect your peace of mind and the people you love.",{"title":980,"hideTitle":27,"content":981}," Frequently asked questions","\n\n::faq{headline=\"Frequently asked questions\" :faqs='[{\"question\":\"Is mortgage protection insurance mandatory?\",\"answer\":\"No, mortgage insurance is an optional policy that helps with mortgage payments if a policyholder faces death, disability or job loss.\"},{\"question\":\"Can I transfer my policy if I refinance?\",\"answer\":\"Yes, you can often transfer your MPI policy if you refinance. However, double-check with your insurance provider to understand the specific terms and conditions of your policy.\"},{\"question\":\"What happens if I sell my home?\",\"answer\":\"MPI typically ends when you sell your home. However, you may have options to transfer the policy to a new home or use any remaining coverage for other purposes. Check in with your insurance provider to figure out what’s possible.\"}]'}\n::","2025-04-14T12:49:00.000Z","You know that old saying, “Life is what happens when you’re busy making other plans”? Well, mortgage protection insurance (MPI) is one contingency plan that helps you stay afloat when life takes an unexpected turn. This insurance for mortgages covers your house payments if you face financial hardship due to unforeseen circumstances like disability or job loss, or if you pass away. While we hope you and your loved ones never need to lean on MPI, it’s wise to cover your bases on the off chance “what ifs” turn into “oh nos.”","Mortgage protection insurance: what you need to know",[736,482],{"introText":987,"body":988,"text":486,"to":487},"Is mortgage protection insurance right for you?","Let’s look at the pros and cons together.",{"title":990,"description":991},"What is Mortgage Protection Insurance (MPI)?","Learn about how Mortgage Protection Insurance (MPI) ensures your mortgage is covered in case of death, disability, or job loss and if it is right for you.","content:articles:home-buying:what-is-mortgage-protection-insurance.json","What Is Mortgage Protection Insurance","articles/home-buying/what-is-mortgage-protection-insurance.json",[530,747],{"_path":997,"_dir":482,"_draft":6,"_partial":6,"_locale":7,"readTime":601,"l1":482,"linkNav":998,"heroMedia":999,"teaserImage":1002,"slug":1004,"sections":1005,"date":1017,"subheadline":1018,"headline":1019,"isFeatured":27,"tags":1020,"link":1021,"seo":1024,"hasSectionNavigation":27,"_id":1027,"_type":78,"title":1025,"_source":80,"_file":1028,"_extension":78,"tagsDetails":1029},"/articles/home-buying/do-you-need-a-realtor-to-buy-a-house",{"introText":546,"text":486,"to":487},{"landscape":1000,"portrait":1001},"/media/article-do-i-need-a-realtor-to-buy-a-house_-mobile-768x512.jpg","/media/article-do-i-need-a-realtor-to-buy-a-house_-desktop-520x638.jpg",{"src":1003},"/media/article-do-i-need-a-realtor-to-buy-a-house_-teaser-500x500.jpg","do-you-need-a-realtor-to-buy-a-house",[1006,1009,1012,1015],{"title":1007,"content":1008},"The benefits of buying a home with a realtor","So, do you need a [real estate agent](/home-buying/articles/what-is-a-real-estate-agent) to buy a house? Let’s get into how an agent can help you on the road to homeownership. \n\n* **Finding your home**: [House hunting](/home-buying/articles/10-questions-to-ask-when-buying-a-house) can get pretty tedious and real estate agents are there to do the heavy lifting on your behalf. They understand your needs and sift through countless listings to find homes that suit your budget and set up property tours. \n* **Knowing the market**: Realtors know if homes are priced right and can provide insights into the neighborhood such as school districts and nearby amenities.\n* **Negotiating the price**: Realtors use their experience and market knowledge to ensure you get the best deal, whether it's negotiating the price or the terms of sale.  \n* **Handling the paperwork**: Realtors handle the [paperwork](/home-buying/articles/closing-documents), crossing the T’s and dotting the I’s so you don’t have to. \n* **Connecting with professionals**: From [home inspectors](/home-buying/articles/how-to-negotiate-repairs-after-inspection) to contractors, Realtors have a network of professionals who can help you before and after the home purchase.   \n* **[Closing with confidence](/home-buying/articles/closing-on-a-house)**: When it’s time to cross the finish line, your agent ensures everything goes off without a hitch so you can start the next chapter in your new home.",{"title":1010,"content":1011},"Can I purchase a home without an agent?","Yes, [buying a home](/home-buying) without a realtor is possible. However, you have to determine whether it makes sense for you. Can you juggle the responsibility and risks of buying a house without a realtor? Let’s weigh the pros and cons.\n\n### The pros and cons of buying without an agent\n\n::content-table{headline=\"\" :tableData='[{\"row\":[{\"column\":\"Pros\"},{\"column\":\"Cons\"}]},{\"row\":[{\"column\":\"Save Some Cash\"},{\"column\":\"It’s Complicated\"}]},{\"row\":[{\"column\":\"You could save on commission fees, keeping more money in your pocket for housewarming goodies!\"},{\"column\":\"Navigating the home buying process can be a maze, especially if you're new to it.\"}]},{\"row\":[{\"column\":\"You’re the Boss\"},{\"column\":\"Time Hog\"}]},{\"row\":[{\"column\":\"Full control means making all the decisions, from which houses to view to how much to offer.\"},{\"column\":\"Get ready to devote a good chunk of your time to everything from scouting properties to deciphering paperwork.\"}]},{\"row\":[{\"column\":\"Direct Talks\"},{\"column\":\"Price Pitfalls\"}]},{\"row\":[{\"column\":\"Chatting directly with sellers might lead to better insights and even a sweeter deal.\"},{\"column\":\"Without a realtor’s market knowledge, there’s a risk you might pay more than the market rate.\"}]},{\"row\":[{\"column\":\"Great Learning Experience\"},{\"column\":\"Legal Snags\"}]},{\"row\":[{\"column\":\"You’ll learn lots about real estate, which is always handy.\"},{\"column\":\"A small mistake in handling legal documents can lead to big problems down the road.\"}]},{\"row\":[{\"column\":\"Explore Freely\"},{\"column\":\"Stress Alert\"}]},{\"row\":[{\"column\":\"You can check out any property that piques your interest, not just those a realtor shows you.\"},{\"column\":\"Handling every detail on your own can be overwhelming and stressful.\"}]}]' :tableLinks='[]'}\n::\n\n### Does buying without an agent actually save you money?\n\nA lot of buyers assume a real estate agent will cost them, but that’s not the case. Most often, the home buyer doesn’t pay their agent’s fees—the seller does. Sellers usually pay a commission of 5-6% of the purchase price, split evenly between the listing agent and the buyer’s agent. \n\nHowever, you may be able to save money by negotiating down the price. Many sellers build the cost of a realtor into [the listing price](/home-buying/articles/how-much-money-do-you-need-to-buy-a-house), so they might accept a lower offer if they don’t have to pay a buyer’s agent fees.",{"title":1013,"content":1014},"How to purchase a home without a realtor","If you’ve decided to be the captain of your own home buying ship, here’s what’s in store at every step.\n\n### Step 1: Negotiate with the listing agent\n\nWithout a realtor in your corner, you'll need to negotiate directly with the listing agent. This can be tricky as the agent represents the seller's interests, not yours. You’ll have to do your homework on [the local market](/home-buying/articles/real-estate-comps), know the value of the home and come prepared to discuss terms with confidence.\n\n### Step 2: Review the closing disclosure and ask questions\n\nThe [closing disclosure](/home-buying/articles/closing-disclosure) is a critical document you get once your mortgage application is approved that outlines the details of your mortgage. It’s a five-page form that includes the loan terms, your projected monthly payments and how much you will pay in fees and other costs. The form is designed to make it easy for you to understand the terms of your loan, compare costs and confirm that you're getting the deal you were promised. Review it carefully to ensure all financial details are in order and ask your lender questions about anything that isn’t crystal clear. Make sure you understand every last detail so there are no surprises later on.\n\n### Step 3: Have a professional review the paperwork\n\nEven if you’re confident in your abilities, you’ll want a professional set of eyes to check your homework. A real estate attorney should review all contracts and legal documents to make absolutely certain you’re in good shape and your interests are protected. A small mistake in documentation could cost you in the long run, so don’t skip this step.\n\n### Step 4: Bring cashier’s checks, proof of insurance and your IDs\n\nCome ready to close the deal with all necessary documentation, including your cashier's checks for any remaining closing costs, proof of homeowners insurance and your identification.\n\n### Step 5: Sign all the documents and get the keys\n\nThis final step is incredibly exciting and one you don’t want to rush. Carefully review and sign your mortgage and make sure you have a copy for your records. Then, you can grab the keys and officially cross the threshold from home buyer to homeowner!",{"title":511,"content":1016,"hideTitle":27},"::faq{headline=\"FAQs\" :faqs='[{\"question\":\"Do I need a real estate lawyer to purchase a house?\",\"answer\":\"While not always legally required, having a real estate lawyer can be extremely beneficial. They can review contracts, handle legal paperwork and ensure that your purchase agreement is legally sound and in your best interest.\"},{\"question\":\"Is hiring a Realtor worth it for buying a house?\",\"answer\":\"For most people, yes. A Realtor brings expertise and peace of mind to the process by helping you find the right home, negotiating a fair price and handling legal details. While it’s possible to buy a home without a real estate agent, the risk for error may pose too much trouble for most buyers.\"},{\"question\":\"Can I buy a house with cash?\",\"answer\":\"Yes, you can buy a house with cash. An all-cash offer can appear more attractive to sellers and remove a mortgage from the equation, simplifying the process. However, you’ll still want a professional like a Realtor or legal advisor to review the paperwork and the transaction.\"}]'}\n::","2024-10-16T16:57:00.000Z","Buying a home is one of the biggest financial decisions you’ll ever make. For most people, using a real estate agent is the smartest choice. An agent guides you through the complexities of home buying, from narrowing your search to making an offer and negotiating the terms.","Do you need a realtor to buy a house?",[688,689,482],{"introText":1022,"text":486,"to":487,"body":1023},"Not sure where to start?","We'll walk you through every step of the home buying process.",{"title":1025,"description":1026},"Do You Need A Realtor To Buy A House","Do you need a realtor to buy a house? We have the pros and cons of buying a home with a real estate agent, and how to purchase a home without one.","content:articles:home-buying:do-you-need-a-realtor-to-buy-a-house.json","articles/home-buying/do-you-need-a-realtor-to-buy-a-house.json",[699,703,530],1775241274253]