If you have purchased a home before, you likely understand that there are several numbers that you must consider during the process. From the selling price of the property to the closing costs, attorney fees to interest rates, there are several factors that determine the value of your purchase. Many homebuyers are not aware that all these numbers are vitally important. In this article, we will share five numbers that need to be analyzed during the home-buying process.

1. Home Insurance Costs

Once you go under contract on a house, you will begin collecting home insurance quotes. The value that your home is insured for is important; it outlines how much money you will receive if a tragic incident occurs at your residence. If this value is significantly under the purchase price of the home, you may want to consider the reasons why. There are many incredible insurance providers that can get you maximum coverage at a minimal cost. Make sure to receive quotes from various vendors so that you can choose the best option available.

2. Principal

The principal of the house is the total amount that you have borrowed on the loan and must repay. Your mortgage will be calculated based on your down payment, interest rates, and other relevant factors. When you are comprehending your monthly mortgage payment, take a look at the amount that you will be paying towards the principal each month. Analyze what you are putting towards your investment versus what is being used towards interest and other costs.

3. Interest Rate

Throughout 2020 and 2021, interest rates have been incredibly low. Interest rates are determined by central banks that have a finger on the overall pulse of the market. It is important that you get your home at an optimal interest rate so that more of your money goes to the principal of your home rather than the interest payments.

4. Appraisal Value

After you go under contract on a home, you will get an appraisal. During the appraisal, a firm will analyze the overall value of your property, home, and location. Ideally, your appraisal value will accurately reflect a price that is near to the selling price of the home. If the appraisal returns at a price higher than you offered, it means your home will likely resell at a higher price in the future. If your appraisal is significantly lower than the price offered on the house, you may have the ability to negotiate the contract with the seller.

5. Closing Costs

There are many closing costs that are considered in the home-buying process. The seller is responsible for real estate fees, seller attorney fees, and the title insurance policy. The buyer is typically responsible for attorney fees, mortgage loan fees, and other miscellaneous expenses. The total amount of closing costs typically ranges between 3% to 6% of the overall price of the home.


There are many expenses associated with the home-buying process outside of the cost of the home itself. Before purchasing a property, it is important that you analyze the closing costs, appraisal value, and interest rates that are associated with it. When you take these important numbers into consideration, you will be able to purchase a house with certainty.