What are common ways of financing for a home in the 300,000 range?

Here’s a mortgage calculator.

You cannot finance a home if you don’t purchase it.

When you buy a house, customarily, you put some money in for a down payment.

Then you borrow the rest at a fixed rate and pay it back over a period of time that you and the bank determine depending on your income and your collateral.
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Whoa. I am backing up here.

Two days ago you said that your wife owned a house ( and a garage that was filled with cereal boxes and other clutter generated by her mother).

Surely you can ask your wife this question? Surely you are not as naive as you sometimes claim to be here?

The rule is 20% down. You can get it with less down but it becomes more difficult and they may want to add mortgage insurance and your interest rate may rise. Assuming 20% + closing costs (figure a few thousand) down, we’ll say $65K. That will leave a mortgage of $240K. Assuming 4% interest and a 30 year note the payment would be $1145/mo. Most likely they’ll want insurance and taxes included in your payment which is very state dependent but figure in total (mortgage/taxes/insurance) it would between $1400—$1500 per month (maybe more depending on taxes in your state).

[Mod Says] Let’s keep responses on topic and flame free, please.

@jaxk Thanks

Wow! I have no idea how this question could have provoked so many unhelpful comments and personal attacks. My advice would be to sit down with a financial advisor or a mortgage broker that you can trust absolutely. Don’t buy more house than you can afford, save up for as much downpayment as you can and don’t get a mortgage that depends on balloon payments because you just can’t count on the money being there when a balloon payment comes due.

I’m no expert but I say do it the old fashioned way: Buy a house you can afford, that you intend to live in for a good long time, save for a decent downpayment and get a 30 year fixed mortgage at the lowest rate you can find.

GA from @lillycoyote. In addition, if you’re a rank beginner, you should read a book such as Home Buying for Dummies (I believe the author is Eric Tyson). If you don’t want to buy it, I’m pretty certain your local library would have it. Don’t worry if it’s not the latest edition, the basic advice would be the same. Also, there’s a website called Redfin that has a real estate forum where you can ask all sorts of questions, and you can search previously asked questions and answers. Good luck!

Looks like he has left the building.

If you need a loan for more than 80% of the home’s value – that is, you can only put less than 20% in for the downpayment – then you have two options:

1. Get the loan for the amount you need, less your downpayment, and also get Private Mortgage Insurance – required by law and by the lender. In the event you cannot pay the loan, then PMI kicks in to protect the lender. It sucks for you because this is money that is gone each month.

2. Get a 2nd mortgage. Most realtors and lending agents are familiar with this technique. Your primary mortgage is for 80% and the second mortgage is for the remainder, less your downpayment. No PMI required. And this way, the money you pay on the 2nd mortgage is good for you as it’s paying on your home and increasing your equity. It’s oftentimes cheaper than PMI!

Keep an eye on your budget… the mortgage payment alone might be something you can afford, but that’s just a portion of what you’re responsible for. You also have yearly costs in the thousands for homeowner’s insurance and property taxes. Most lenders will handle those on your behalf – and for free – through escrow. This means you send the mortgage company additional money each month to cover those items and then they pay your homeowner’s insurance premium and property taxes for you when their due. Those two items can add several hundred dollars to your mortgage payment each month. Be sure to factor that in.

Of course, utilities and general maintenance on your home can be costly. A $300,000 home with approximately 3,000 sq.ft. in Texas during summer can yield a summer month electricity bill over $1,000. So ‘ware the costs!

If you do go with a 30-year loan, try to throw additional money towards paying down the principal each month. If you’re able to make a single extra monthly payment each year, then you can pay off the 30-year loan in just 18 years… saving you a metric ton of money.