This handy tool will help you estimate how much mortgage you can handle before you start looking for a home. Another thing to consider is your down payment amount. There are even some special programs for first-time buyers that help with closing costs. The Benefits of Equity Equity is the principal part of your monthly payment that you can use as a down payment on a new home, or collateral for a home equity loan. You can use a home equity loan to finance home improvements, a child's college tuition, or a new car.
Real estate is also a great way to keep a hedge against inflation.
While some homes do appreciate in value more quickly than others, real estate usually keeps pace with inflation. As a homeowner, when filing your taxes you can deduct the interest portion of your monthly payment-and that can mean big savings. You can deduct your property taxes, too. So look at what your monthly mortgage payment will actually be, taking your tax breaks into consideration. Your loan officer will show you which items you should bring to apply so neither of you will need to wait for various written income, asset and liability information.