Three numbers to keep separate

Write down your comfortable monthly housing payment, available cash for the purchase, and reserves you intend to keep untouched. Cash to close can include the down payment, lender and settlement charges, and prepaid taxes or insurance. The deposit you put into escrow is generally credited toward your purchase, subject to the transaction terms; it is not a second down payment. Ask escrow and your lender to show the accounting.

A loan with a smaller down payment may preserve cash but create mortgage insurance or other costs. A larger down payment may reduce borrowing but leave less room for repairs. Neither choice is automatically right.

Compare the complete payment

Ask the lender to itemize principal and interest, taxes, homeowners insurance, and any mortgage insurance. Add HOA dues and special taxes that may not be included in that quote. Property-tax estimates based on the seller's bill can understate the buyer's situation after reassessment. Ask about supplemental tax bills and how they are handled.

Run the mortgage payment calculator. The inputs are assumptions, not a loan quote. Compare the condo versus house ownership costs before assuming a lower purchase price creates a lower monthly bill.

San Diego property costs vary by address

A home in Carmel Valley or Chula Vista may have HOA and special-tax obligations that differ from a nearby home. Do not infer the bill from the neighborhood name. An older home in Clairemont may require a different maintenance reserve than a newer condo. Insurance availability also needs an actual quote.

Compare Carmel Valley's ownership cost questions, then collect documents for the specific property.

What to request from the lender

  • A written Loan Estimate for each comparable scenario.
  • The interest rate, whether it is locked, and when the lock expires.
  • Points, credits, and the tradeoff between upfront cost and payment.
  • Estimated cash to close, including prepaid items and reserves.
  • An explanation of mortgage insurance and possible cancellation rules.
  • A stress test for income changes, maintenance, and unexpected assessments.

If assistance would help, investigate first-time buyer programs early. Never spend the reserve merely because a lender approves a larger loan.