Mortgage Calculator IN (Indiana)
Overview of Indiana Housing Market 2023
In 2023, Indiana's housing market offers diverse options across urban, suburban, and rural areas. Fueled by a strong economy and affordability relative to neighboring states, property values continue to rise. Key cities like Indianapolis, Fort Wayne, and Bloomington attract buyers and investors with job opportunities and cultural appeal. Challenges include inventory shortages in some markets, affecting affordability. As the year progresses, keeping an eye on local economic indicators and real estate trends will be crucial for anyone looking to navigate the Indiana housing market effectively.
At Brighton Bank, our commitment goes beyond just providing financial services. We believe in empowering our customers with the tools and resources they need to make informed decisions about their financial future. That's why we've put together this dedicated mortgage calculator landing page – to offer you a seamless, transparent, and personalized way to explore your home financing options.
What's on this page?
-Property Tax in Indiana
-Closing Costs in Indiana
-Housing Market in Indiana
Mortgage Calculator IN (Indiana)
How to Calculate a Mortgage Payment
Calculating a mortgage payment involves a few key components: the loan amount, interest rate, loan term, and the type of mortgage. The most common type of mortgage is a fixed-rate mortgage, where the interest rate remains constant throughout the loan term. Here's how to calculate your monthly mortgage payment: The formula to calculate the monthly mortgage payment is:
M = P * [r(1+r)^n] / [(1+r)^n - 1]
The Variables are as follows:
M is the monthly mortgage payment.
P is the principal loan amount.
r is the monthly interest rate (annual rate divided by 12 and converted to a decimal).
n is the number of monthly payments (loan term in years multiplied by 12).
How a Mortgage Calculator can help you.
The Mortgage Calculator IN (Indiana) is a powerful tool designed to assist individuals in making well-informed decisions about their home financing options. This calculator provides a range of benefits:
Payment Estimation: Predict your monthly mortgage payments based on loan details, aiding budget planning.
Scenario Comparison: Testing different loan amounts, interest rates, and terms to understand their effects on payments.
Loan term: Choose 30 years for lower monthly payments but higher interest or 15 years for less interest with higher monthly payments.
Avoiding strain: Brighton Bank's calculator factors taxes, insurance, and mortgage costs for a clear monthly commitment view.
Down payment: Lower 3% down payments feasible, calculator assists in optimal initial investment.
Affordability Assessment: Determining how much house you can comfortably afford within your budget.
Interest Analysis: This shows the total interest paid over the loan's life, guiding decisions on loan terms and types.
Key Determinants of Your Mortgage Payment
At Brighton Bank, we understand that your mortgage payment is influenced by a range of factors. Here are the essential elements that contribute to shaping your mortgage payment:
Loan Amount and Interest Rate: The total amount you borrow and the interest rate applied directly impact your monthly payment. A higher loan amount or interest rate typically results in higher monthly payments, while a lower loan amount or interest rate leads to more manageable payments.
Loan Term and Type: The length of your loan term and whether it's a fixed-rate or adjustable-rate mortgage matters. Shorter terms often have higher monthly payments but lower overall interest costs. In contrast, longer terms may offer lower monthly payments but potentially higher interest expenses over time.
Property-Related Costs: Property taxes based on your home's value and location, along with homeowners insurance to safeguard your investment, are included in your monthly payment. We can help you estimate these costs accurately.
Down Payment and PMI: A larger down payment reduces your loan amount, potentially lowering your monthly payment. If your down payment is less than 20 percent, Private Mortgage Insurance (PMI) might apply, adding a cost to your payment until you gain sufficient equity.
Our team at Brighton Bank is committed to guiding you through these intricacies, ensuring you make informed decisions tailored to your financial aspirations. With our expertise, you can navigate these elements and secure a mortgage payment that suits your unique needs.
What you can do to lower your monthly payment
A mortgage constitutes a long-term financial arrangement aimed at funding a home purchase, necessitating both repayment of the principal amount and the regular settlement of interest to the lender. The monthly cost of a mortgage can vary significantly based on factors like property price, location, and the type of loan selected.
To assist you in curbing your monthly mortgage expenses and achieving savings, Brighton Bank offers insightful strategies:
Opt for a more budget-friendly home: Selecting a less expensive property translates to a reduced loan amount and subsequently lowers your monthly mortgage obligation.
Make a larger down payment: If you make a down payment of 20% or more, you won't have to pay private mortgage insurance (PMI). PMI is an extra insurance that lenders require if your down payment is less than 20%. It can add hundreds of dollars to your monthly mortgage payment.
Secure a lower interest rate: Engage in thorough research across different lenders to identify the most favorable interest rate, contributing to a decreased overall mortgage expense.
Adjust your loan term: Opting for a longer loan term results in more manageable monthly payments, though it leads to a higher cumulative interest payment over time.
How lenders decide how much you can afford to borrow
When considering your borrowing capacity, Brighton Bank takes into account several key factors to ensure a responsible and suitable lending decision. Here's how Brighton Bank determines your borrowing capacity:
Income Evaluation: Brighton Bank assesses your income stability and sources to gauge your ability to comfortably make repayments.
Debt-to-Income Ratio (DTI): The bank analyzes your existing debts in relation to your income to determine a borrowing amount that maintains a manageable debt load.
Credit History Check: Your credit score and history are reviewed to judge your creditworthiness and ensure that the borrowing terms align with your financial track record.
Down Payment & Affordability: Brighton Bank considers your down payment amount, overall property expenses, and the chosen loan type to ensure that the borrowing amount remains within your financial means.
Determining Your Affordable Home Budget in IN (Indiana)
To set an affordable home budget in Indiana, assess your finances and local housing trends. Evaluate income, debts, and expenses to understand your capacity. Research the real estate market, including recent property sales and average prices in your desired area. Align your budget with local realities for sustainable housing costs.
Factor in additional costs beyond the mortgage itself, including property taxes, homeowners association (HOA) fees, insurance, and maintenance expenses. It's important to have a buffer for unexpected costs to ensure your budget remains sustainable over time. As a general rule of thumb, your monthly housing expenses should ideally not exceed around 25-30% of your monthly income.
You're transitioning from renting to owning in Indianapolis. You earn $5,000 monthly, with expenses at $1,500. Following the 25-30% income-to-housing rule, your budget is $1,250 - $1,500. Market research shows your desired home's average price is $250,000. A 20% down payment of $50,000 leads to a $200,000 mortgage. Considering taxes, insurance, and upkeep, your total monthly housing budget is roughly $1,250. By carefully evaluating finances, researching locally, and factoring expenses, you confidently pinpoint an appropriate home budget.
By meticulously evaluating your financial capabilities, researching the local real estate landscape, and accounting for all associated expenses, you can confidently determine an affordable home budget in Indiana that aligns with your long-term financial goals and aspirations.
Next Steps: What to Do After You Have Estimated Your Mortgage Payments
Following your estimation of mortgage payments, the journey towards homeownership unfolds with essential next steps guided by Brighton Bank.
Whether you're embarking on this path for the first time, considering refinancing, or managing credit challenges, Brighton Bank is here to offer invaluable support at every phase.
Compare Our Rates: Before making a commitment, it's crucial to explore and assess offers from various mortgage providers. Brighton Bank encourages you to compare our rates with others, ensuring you make an informed decision. For more details, you can also access information about mortgage rates tailored to your location.
Undecided? Rent or Buy: If you're still weighing the options between renting and buying a home, Brighton Bank provides the guidance you need to evaluate which choice best suits your unique circumstances and financial goals.
Expand Your Knowledge: Brighton Bank provides a comprehensive resource to help you expand your understanding of diverse mortgage options. Whether you're interested in reverse mortgages, VA home loans, or FHA home loans, Brighton Bank equips you with insights to select the mortgage type that aligns with your preferences and requirements.
Indiana's previously unsustainable surge in house price appreciation saw a slowdown in 2022, as the September increase of around 7% marked the smallest year-over-year change since the pandemic's onset. Nevertheless, this easing of price growth provides little respite for potential homebuyers, especially considering the substantial jump in 30-year mortgage rates, rising from 3.45% in January to 6.90% by October.
Indiana's 2022 house price growth moderation didn't ease homebuying due to a rapid rise in 30-year mortgage rates from 3.45% in January to 6.90% by October. This increased home financing costs despite slower price appreciation. The elevated rates dampened housing demand by raising borrowing expenses, potentially causing lower prices, and also affecting related sectors like construction and jobs.
What is the housing market like right now?
In July 2023, Indiana witnessed a 3.6% increase in home prices from the previous year, with a median selling price of $258,400. However, the average number of homes sold experienced a decline of 19.9% year over year, amounting to 7,079 homes sold this July, compared to 8,837 homes sold in July of the previous year. The median time homes spent on the market was 16 days, marking a 4-day increase compared to the previous year.
What does this mean?
The movement and speed of home price shifts provide insights into the housing market's vitality and the shifting affordability of homes. At this juncture, the median home price in the United States rests at $258,400.
Average Closing Cost in IN (Indiana) Counties
Average closing costs in Indiana counties can vary widely based on factors such as property value, location, and local real estate practices. On average, Indiana homebuyers can expect to pay around 2% to 5% of the home's purchase price in closing costs. These costs typically include fees for services like appraisal, title insurance, lender charges, escrow services, and various taxes.
Average closing costs are the fees and expenses that homebuyers and sellers typically incur during the process of closing a real estate transaction. These costs can vary widely depending on factors like location, property value, and the specific terms of the deal. On average, closing costs typically range from 2% to 5% of the home's purchase price. For a homebuyer, these costs can include expenses such as loan origination fees, appraisal fees, title insurance, property taxes, and attorney fees. Sellers, on the other hand, may be responsible for costs like real estate agent commissions, transfer taxes, and any outstanding liens or repairs required to close the sale.
The exact breakdown of closing costs can differ from one transaction to another, but certain fees are fairly standard across most real estate transactions. These can include lender fees, title insurance, and escrow fees. It's essential for both buyers and sellers to carefully review the estimated closing costs provided by their real estate professionals and lenders to have a clear understanding of the financial implications of the transaction. Homebuyers may also have the opportunity to negotiate some of these costs with the seller or lender, potentially reducing their financial burden during the closing process.
The average closing costs encompass a range of fees and expenses incurred when buying or selling a property, and they typically amount to a percentage of the home's purchase price. The specific costs can vary widely depending on various factors, and it's crucial for individuals involved in a real estate transaction to be aware of these costs and to review and negotiate them whenever possible. Understanding closing costs is a fundamental aspect of the homebuying or selling process and helps individuals budget effectively for the overall cost of their real estate transactions.
Average Property Tax in IN (Indiana) Counties
Understanding average property taxes in different Indiana counties is crucial for homeowners and investors. It helps assess affordability, make county comparisons, plan finances, and guide investment choices. This knowledge informs budgeting, decision-making, and potential returns on real estate investments.
The dataset provides a comprehensive overview of the property tax landscape spanning several counties, shedding light on key indicators such as median home values, median annual property tax payments, and average effective property tax rates. Through a meticulous analysis of these metrics, distinct patterns emerge, offering insights into the complex financial commitments property owners grapple with within each county.
For instance, when we delve into Allen County, the reported median home value of $136,700 corresponds to a median annual property tax payment of $1,386, resulting in an average effective property tax rate of 1.01%. This interrelation between property valuation and tax expenditure echoes the financial dynamics unique to each locality. A parallel narrative unfolds in Boone County, where the higher median home value of $245,200 translates to a median annual property tax payment of $2,610, further reflecting an average effective property tax rate of 1.06%.
By delving into this data, individuals gain an in-depth understanding of the intricate interplay between property assessments and ensuing tax obligations that define each county's financial landscape. This data empowers prospective homeowners and investors to make well-informed decisions, factoring in the nuanced tax burdens that shape each region's real estate dynamics. As such, the dataset serves as a valuable tool for navigating the multifaceted realm of property ownership and financial planning across diverse counties.
What Property Tax Exemptions Are Available in Indiana?
Let's delve into four common property tax exemptions applicable in Indiana:
Homestead Exemption. In Indiana, the homestead exemption applies to residential property or tangible personal property (such as a mobile home) that constitutes your personal or family residence. The Indiana bankruptcy homestead exemption allows you to protect $19,300 in home equity; and $38,600 if you are married filing jointly.
Qualified Disabled Veterans. Veterans who served in the Gulf War, World War II, Korea, or Vietnam, received an honorable discharge, or have a disability rating of at least 10% qualify for a property tax exemption of up to $24,960.
Senior Citizen. In Indiana, if you are over 65, you will receive a reduction in your home’s assessed value of $14,000 or half the assessed value, whichever is less. The lower the assessed value of your home, the smaller your property tax bill.
Disabled Persons. Individuals who are blind or disabled can lower their property tax bill with this deduction. You must own a home or be buying one on recorded contract to receive the deduction. The deduction lowers the assessed value of your property by $12,480 or the amount of your assessment, whichever is less.
Property Tax Landscape in Indiana and Beyond
The property tax landscape in Indiana is characterized by its reliance on local property taxes to fund a significant portion of local government services, including schools, infrastructure, and public safety. Property taxes are assessed and collected at the county level, and the rates can vary widely across different counties and municipalities within the state. Indiana has implemented various property tax caps to limit the amount that property tax bills can increase each year, which has aimed to provide more predictability for homeowners and prevent excessive tax burdens.
The property tax scenario varies across states outside Indiana due to distinct regulations. Some states don't impose property taxes, leaning on alternate revenue streams like sales or income taxes. Other states utilize complex frameworks merging local and state taxes. Property tax exemptions and deductions are commonly employed to aid specific demographics like veterans, seniors, or low-income individuals. Grasping property tax dynamics in Indiana and across states is vital for property holders to adeptly handle taxes and financial strategies.
Navigating the intricacies of property taxes requires a comprehensive understanding of local regulations and potential tax breaks. Consulting with tax professionals and staying informed about any changes to property tax laws and exemptions is essential for homeowners and property investors in Indiana and elsewhere.
Home insurance, also known as homeowners insurance or property insurance, is a type of insurance policy that provides financial protection to homeowners against various risks and perils that could damage or destroy their property. This insurance coverage helps homeowners recover financially in case of unexpected events that result in damage to their homes, or belongings, or liability for injuries or damages to others that occur on their property.
Coverage Types and Options
When it comes to protecting your most valuable asset, understanding your options is essential. Home insurance offers various types of coverage to ensure you're safeguarded against unexpected events. Here are some key coverage types:
Dwelling Coverage: This protects the structure of your home itself, including its foundation, walls, roof, and more.
Personal Property Coverage: Covers your belongings, such as furniture, electronics, and clothing, in case of damage or theft.
Liability Coverage: Offers financial coverage in the event someone gets hurt on your premises and you are deemed liable.
Additional Living Expenses: Helps with temporary housing and living expenses if your home becomes uninhabitable due to covered events.
Factors That Determine Coverage Needs for IN (Indiana)
When considering homeowners insurance in Indiana, there are several factors that will determine the coverage you need. These factors can vary from person to person, but it's important to understand them in order to make an informed decision about your policy. Here are some key factors to consider:
Location - The location of your home plays a significant role in determining your coverage needs. While Indiana lacks a coastline, it does encompass varying risks within its regions. Flood-prone areas near rivers like the Wabash and White Rivers can experience flash floods and overflow. Tornado activity is a concern, particularly in certain regions, while urban centers like Indianapolis and Gary might have high-crime neighborhoods. Past industrial activity in areas like Gary could contribute to pollution. Severe winter weather with heavy snowfall poses challenges, and rural areas might face wildfire risks. Traffic congestion, especially in cities like Indianapolis, can result in accidents, while minor earthquakes are a possibility. These risks underscore the importance of considering local conditions and preparedness when residing or investing in specific Indiana areas.
Coastal Proximity - For homes located near the coast, there may be increased risks associated with hurricanes, storm surges, and coastal erosion. It's important to have coverage that protects your property from these potential threats.
Flood Zones - If your home is located within a flood zone, it's crucial to have flood insurance coverage, as standard homeowners insurance policies typically do not cover flood-related damages.
High-Crime Neighborhoods - Homes situated in areas with higher crime rates may require additional coverage for theft and vandalism. This can help protect your property and belongings in case of unfortunate events.
Dwelling Features - The characteristics of your home also influence your coverage needs. Factors such as the age, size, construction materials, roof type, and overall condition of your dwelling can impact the cost of insurance and the level of coverage required.
Property Value - The value of your property, including both the land and the physical structure, impacts the amount of coverage you need. It's important to have enough insurance to cover the cost of rebuilding your home if it's damaged or destroyed, which might be different from the market value of the property.
Personal Belongings - Your personal belongings, such as furniture, electronics, clothing, and other possessions, need to be covered against events like theft, fire, or other damage. You'll need to estimate the value of your belongings accurately to ensure you have sufficient coverage. It's a good idea to create a home inventory with detailed descriptions and estimated values of your possessions.
Tips for Lowering Your Homeowners Insurance Premiums for IN (Indiana)
Homeowners in Indiana are often looking for ways to save on their insurance premiums. Here are some helpful tips to lower your homeowner's insurance costs:
Explore Options: Don't just accept the initial quote you get. Make an effort to obtain and compare estimates from several insurance providers.
Increase Deductibles: Think about increasing your deductible if you can afford a larger upfront cost during a claim.
Combine Coverage: A lot of insurance firms provide discounts when you merge various policies, like home and car insurance. Inquire about the potential savings when obtaining quotes.
Improve Home Security: Installing smoke detectors, burglar alarms, deadbolt locks, and other security measures can reduce the risk of damage or theft, leading to lower premiums. Be sure to inform your insurer once you have implemented these security features.
Maintain Good Credit: In many states, including Indiana, insurance companies can use your credit score to determine your premiums. Keeping a strong credit rating can assist in reducing your insurance premiums.
Stay Claims-Free: Building a claims-free history can often lead to discounts on your premiums. Avoid making smaller claims and save your insurance for significant losses.
By implementing these tips, homeowners in Indiana can potentially enjoy significant savings on their homeowner's insurance premiums while maintaining adequate coverage.
Trends in Homeowners Insurance Rates for IN (Indiana)
Homeowners insurance rates can fluctuate over time due to various factors. Staying informed about the trends in homeowners insurance rates helps homeowners in Indiana make educated decisions regarding their policies. Here are some recent trends worth considering:
Increasing Material and Labor Costs: The cost of building materials and labor can impact homeowners insurance rates. In recent years, the rising prices of construction materials and the demand for skilled labor have contributed to an increase in insurance premiums.
Climate Change Impact: Climate change can result in an increase in severe weather events, including hurricanes, storms, and floods. These events can cause significant property damage and result in insurance companies adjusting their rates accordingly.
Technological Advances: Advancements in technology have led to improved methods of assessing risks and deciding insurance premiums. Insurance companies are increasingly leveraging data and analytics to determine rates, resulting in more accurate pricing based on individual risk profiles.
Market Competition: The competitive landscape among insurance companies in Indiana can influence rates. When multiple insurers compete for customers, it can lead to more competitive pricing and potential savings for homeowners.
Legislative Changes: Changes in local or state laws can also impact homeowners insurance rates. It's important to stay informed about any regulatory changes that may affect your premiums.
Keeping an eye on these trends helps homeowners in Indiana understand the factors driving insurance rates and make informed decisions when purchasing or renewing their policies.
Average Homeowners Insurance Costs for IN (Indiana)
Understanding the average homeowners insurance costs in Indiana provides homeowners with a benchmark for comparison. While individual premiums can vary based on numerous factors, here is an overview of the average costs in the state:
In August 2023, the average yearly cost of homeowners insurance in Indiana is $1,668, amounting to $139 per month. This cost is notably 5% less than the national average expenditure of $1,754 per year.
- This average cost, however, can vary depending on the factors discussed previously, such as location, dwelling features, property value, and personal belongings.
Coastal properties or areas prone to flooding may experience higher premiums due to increased risks.
It's important to note that this average cost is for a standard homeowners insurance policy and does not include any additional coverages or endorsements.
Homeowners should request personalized quotes from insurance companies to obtain accurate estimates based on their specific circumstances.
By understanding the average homeowners insurance costs in Indiana, homeowners can better budget for their insurance expenses and ensure they have appropriate coverage without overpaying.
Indiana State Average Insurance Premiums by Dwelling Limit
The data provided gives us valuable insights into Indiana's property tax structure, showcasing a clear trend of increasing property tax obligations as the assessed value of homes goes up. This observation highlights Indiana's use of a progressive property tax system, where homeowners with higher-valued properties pay a larger share of their property's value in taxes. For instance, a home valued at $250,000 in Indiana comes with an estimated property tax obligation of $1,700.26, while a more expensive property valued at $750,000 carries a considerably higher property tax of $3,940.59.
The progressive property tax system in Indiana serves multiple essential purposes. Firstly, it plays a vital role in funding critical public services such as education, healthcare, and infrastructure development, ensuring that these services receive the necessary financial support. Secondly, it aims to achieve a fairer distribution of the tax burden, with those who have more valuable properties contributing proportionally more to the state's revenue pool.
For individuals considering homeownership in Indiana, this data is a valuable tool. It empowers prospective homebuyers to estimate their potential property tax obligations based on the assessed value of the homes they are interested in. This information is pivotal for accurate budgeting and financial planning, allowing homeowners to incorporate property taxes into their overall housing expenses.
Furthermore, this data underscores the importance of considering property taxes when making real estate decisions. Homebuyers should carefully assess how property taxes fit into their housing budget, especially when evaluating homes in different price ranges. Additionally, current homeowners should be prepared for potential increases in their property tax bills, particularly if property values appreciate over time.
Mortgage Resources in IN (Indiana)
Mortgage resources refer to various tools, information, and support available to individuals seeking to obtain or manage a mortgage loan. Mortgage resources are valuable for both first-time homebuyers and existing homeowners looking to refinance or better understand their mortgage options.
Brighton Bank Mortgage Services
Are you looking for reliable mortgage services in Indiana? Look no further than Brighton Bank! We are dedicated to helping you achieve your homeownership dreams with our range of mortgage solutions tailored to meet your unique needs. Whether you're a first-time homebuyer or a seasoned real estate investor, Brighton Bank is here to assist you every step of the way.
Why Choose Brighton Bank for Your Mortgage Needs?
1. Personalized Service: Our team of experienced mortgage experts will work closely with you to understand your financial goals and find the right mortgage product that fits your budget and lifestyle.
2. Competitive Rates: We offer competitive interest rates and loan terms to help you save money over the life of your loan. Our goal is to make homeownership affordable for you.
3. Simple Pre-Approval Process: Getting started on your homeownership journey is easy with Brighton Bank. You can kickstart the pre-approval process today with just a few simple steps.
Start Your Homebuying Journey with Brighton Bank
Ready to take the first step towards homeownership in Indiana? Click the button below to begin the pre-approval process with Brighton Bank. Our team is excited to work with you and help you achieve your homeownership dreams!
Local Economic Factors in IN (Indiana)
Beyond your mortgage payment, it's essential to consider the local economic factors that can impact your financial stability and property value in Indiana:
Employment Opportunities: The availability of jobs and the health of local industries play a role in your financial security and ability to meet mortgage payments.
Market Trends: Real estate markets can experience fluctuations in prices. Our team can provide you with insights into current market trends to assist in your decision-making.
Infrastructure and Development: Development projects, transportation networks, and infrastructure improvements can affect the desirability and value of properties in certain areas.
Property Value Trends: Understanding how property values have changed over time can give you a sense of the potential appreciation of your investment.
Using a mortgage calculator is a simple and efficient way to estimate your monthly mortgage payment. By entering essential details like the loan amount, interest rate, and duration of the loan, you can swiftly determine your monthly payments. It's crucial to note:
Loan Amount (Principal): This is the total amount of money you're borrowing to purchase the property.
Interest Rate: This is the annual interest rate on the loan. Make sure to convert this to a decimal by dividing it by 100.
Loan Term: The loan term is the number of years you have to repay the loan. It's usually expressed in years. Typical loan terms are 15, 20, or 30 years. A longer-term typically results in lower monthly payments but more interest paid over time.
Down Payment: The down payment is the initial amount of money you contribute toward the purchase price of the home. It's usually a percentage of the home's price, and a larger down payment can result in lower monthly payments.
Amortization: Amortization is the process of gradually paying off your mortgage over time through regular monthly payments. Early on, a larger portion of your payment goes toward interest, while later in the loan term, a larger portion goes toward paying down the principal.
Closing Costs: These are the fees associated with finalizing the mortgage and completing the home purchase. They can include things like appraisal fees, attorney fees, title insurance, and more.
Housing Market: The housing market refers to the buying and selling of residential properties. It includes all the activities and transactions related to homes, apartments, and other types of housing.
Mortgage: A mortgage refers to a loan acquired to buy a home, where the property acts as security for the borrowed amount.
Private Mortgage Insurance (PMI): A type of insurance that is often required by lenders when a borrower puts down less than 20% of the home's purchase price as a down payment. It's commonly used to mitigate the increased risk associated with lower down payments.
Debt-to-Income Ratio: A financial metric used by lenders to assess a borrower's ability to manage their debt payments in relation to their income. The DTI ratio helps lenders evaluate the borrower's financial stability and the likelihood of repaying the loan.