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Home Affordability
See where you max out
3. Spend no more than 2 1/2 times your income on a home. For a down payment, it's best to come up with at least 20%.
Many buyers in recent years have stretched the limits of affordability, and have bypassed the traditional 20% down model. But make a smaller down payment, and most lenders will require you to have private mortgage insurance (PMI), which adds a minimum 0.5% of the loan amount to your mortgage payments, about $1,000 more a year on a $200,000 principal.
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You don't have to spend a lot of time to put your financial house in order. Money Magazine shows you the easy way. (more) |
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