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Home Buying Education Center FAQs

Am I ready for home ownership?

The first step in your decision-making process is to see if you can afford a house. Consider if you can save for as much as a 3 to 20 percent down payment plus closing costs (sometimes an additional 5 percent). A general rule of thumb is that your monthly mortgage payment should not exceed 28 percent of your gross monthly income. However certain loans may allow a higher ratio. If there is a home that meets your needs and your budget and you could save for a down payment, homeownership may be right for you.

Beyond my payment, what other costs do I need to budget for?

Figuring out the real cost is vital to knowing if you can afford to buy a house. Add up the cost of your mortgage payment, property taxes and homeowners insurance. For many people, this amount will be less than or equal to their current rental rate. With a fixed-rate mortgage, you can enjoy peace of mind knowing that your mortgage payment will stay the same for the term of your mortgage.

How much home can I afford?

Try out our Mortgage Calculators to get a good handle on how much home you can afford, and what payment amounts you can expect based on the mortgage amount.

Rent vs. Buy?

When considering whether to buy or rent there are a few things to keep in mind.

  • Compare costs. You can compare a mortgage payment to a rent payment, but be sure to include the tax savings of a mortgage payment by talking with your tax advisor. Also consider the cost of maintenance and upkeep of the home.

  • Build a savings cushion. Mortgage closing costs vary and are dependent on your home's purchase price. Then there's a down payment to plan for, which can range from 3% to 20% of the purchase price, depending on the loan program. These up-front costs can be a significant figure when you’re just starting out. Be sure you have enough put away to get off on the right foot.

  • How long will you live there. If you think you may want to move within a few years, renting might be a better option than buying. There are up-front costs associated with buying a home, so the longer you own the home, the better a deal it becomes.

When is the right time to become a home owner?

If you plan to move to another area soon or have a job with an uncertain future, buying a home might not be for you. The old rule of thumb was that buying made sense if you planned to stay put for three to five years. With the costs involved in closing a mortgage, financial planners are now suggesting at least seven years in your home.

What are the hidden costs of owning a home?

When purchasing a home, you'll want to watch for additional costs that might creep into your budget. Many new homes, condos and townhomes have homeowner association fees that can add hundreds of dollars to your monthly expenses. You'll also need to budget for big ticket repairs that may be needed like a new roof or furnace.

What is a Conventional Loan?

A conventional loan is a mortgage that is not insured or guaranteed by government agencies like the FHA (Federal Housing Administration) or USDA (United States Department of Agriculture). It is typically fixed in its terms and rates.

What if I want a low down payment? What are my options?

An FHA loan offers a 3.5% minimum down payment, but to qualify for the lower down payment options, you need to meet the credit score criteria for the specific program. FHLMC Home Possible® Advantage loan offers a 3% down payment.

See our home loan options

See all of our home loan options, apply online, take a look at the home buying process, or get in touch with a Mortgage Loan Officer to walk you through the process and answer all of your questions.

Home buying options

Mortgage loan process

Have questions?

Call us at (877) 820-2265 to schedule an appointment with a Mortgage Loan Officer or fill out the contact form below and we will have one of our Loan Officers reach out to answer any questions you have.

Disclosures and borrower information
Macatawa Bank's primary lending area is West Michigan. Online applications will be considered received on today’s business day if submitted during the course of the bank’s normal business hours;
9am EST – 5pm EST Monday – Friday, excluding Federal Holidays
9am EST – 12pm EST on Saturdays
Applications received outside of this timeframe, including Federal Holidays and Sundays will be considered received the next business day.

We're happy to help.

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