You've found the perfect house in a nice neighborhood. And while the prospect of home ownership can be exciting, it's also a little scary. Is it right for you? Ask yourself the following questions to help you figure it out. 

Are You Starting on Sound Financial Footing?  

If you’re struggling with debt or bill payments, or you’re uncertain about your employment future, it may be best to postpone buying a home. The first hurdle will be the down payment, which can be substantial. For a $300,000 house, the typical 20% down payment that you’ll need for many conventional mortgages comes to $60,000. A smaller down payment is possible, but you may have to pay more interest. In addition, if you put down anything lower than 20% you will have to make monthly private mortgage insurance—or PMI—payments, so you need to factor that into your budget. If your financial situation is shaky or you don’t have enough for the down payment, consider postponing your purchase until you’re better situated.  

What Kind of Mortgage Is Best for You?  

Among the most popular financing choices are: 

• Fixed-rate loans. The interest you pay will stay the same for the life of the loan, typically 10 to 30 years.  
• Adjustable rate mortgages (ARMs). The interest rate is reset at regular intervals, such as one year, although there are many variations on ARMs.  
• Balloon mortgage. These offer low initial monthly payments and a large balloon payment to pay off the mortgage amount after a set number of years.  

In terms of the mortgage sources, choices include: 

• Conventional mortgages offered by a variety of lenders. 
• Federal Housing Administration (FHA), Veteran’s Administration (VA) or U.S. Department of Agriculture loans, all of which offer beneficial deals for buyers who meet certain qualifications.  

What Will Home Ownership Cost?  

You’re probably already aware that the costs of home ownership will include monthly payments for mortgage principal and interest, property taxes, home insurance and PMI, if required. Other regular expenses for home ownership will include: