Home Purchase Financial Decision Modeling

How this engine works

You enter your own figures; the engine models two scenarios side by side and shows the twelve-month difference between them. The outputs are estimates built from your inputs and documented assumptions — not predictions, and not advice. Mood and stress are self-reported context that adjust the wording of the summary, nothing else. Inputs are processed in your browser. The full methodology, including what the engine does not claim, is on the Decision Center.

Step 2: Decision Forge — compare assumptions

Decision scenarios with reflection prompts

Each scenario in the tool above presents two options drawn from this event and models them side by side from the figures you entered. Before the comparison, the page names a cognitive-bias concept as an educational reflection prompt. It is a general prompt attached to the scenario rather than a finding about you: the page does not test whether the concept applies to your situation, and it does not indicate which option you should choose.

Self-reported context at decision time

The page does not create a psychological profile. Mood and stress may tailor wording and general next-step suggestions. They do not change the entered financial values or scenario math. They do not establish decision readiness. The named bias concept is a general reflection prompt; the page does not detect bias, assess decision capacity, diagnose a condition, or predict outcomes.

The closing clocks, and the one nobody tells you to watch

A purchase runs on business days rather than calendar days, and Regulation Z does not define a business day the same way twice. Three of these four are counted in business days; the fourth is counted against the amortisation schedule and runs for years.

What you actually need to put down

The belief that a purchase requires twenty percent down keeps a large number of people renting who could buy. Conventional loans go down to three percent, FHA to 3.5 percent, and VA and USDA loans to nothing at all. The median down payment for a first-time buyer is ten percent — a figure published by the realtors’ trade association rather than by any federal agency, which is worth saying because no government body measures it.

What twenty percent buys you is the avoidance of mortgage insurance, and that is a cost question rather than an eligibility one. On the cost itself, be sceptical of the ranges you will read: no federal source publishes a private mortgage insurance cost range, and the ubiquitous half-a-percent-to-two-percent figure has no source of record behind it. Get the actual number from the actual lender on the actual loan.

What is documented is when it comes off, and the rules are specific.

The 2026 loan limits

Closing costs, and the one number with a source behind it

The “two to five percent of the purchase price” rule is not traceable to any primary source. The figure that is: median total loan costs of $6,684 on home-purchase loans, from the mortgage data lenders are required to report. By loan type the spread is wide — about $5,433 on a conventional conforming loan, $7,530 on a VA loan and $11,368 on an FHA loan.

One precision point that matters when you are budgeting: total loan costs are not cash to close. That figure excludes prepaid interest, the money that funds your escrow account, and some third-party items. Treat it as the lender-side number and expect the amount you actually bring to be larger.

Two different three-day rules

Both are called the three-day rule, and confusing them costs people their walk-away window.

The two clocks even count days differently: the delivery clock uses days the lender is open for business, while the waiting periods use all calendar days except Sundays and federal holidays. If a lender asks you to waive the Closing Disclosure period, the answer is almost always no — that window exists so you can compare the final numbers against the estimate without a room full of people waiting.

The tax picture, and the deduction that changed

Mortgage interest is deductible on acquisition debt up to $750,000 for debt incurred after 15 December 2017. Older debt is grandfathered: $1,000,000 for debt incurred between 14 October 1987 and that date, and no limit at all for debt predating October 1987.

The larger change for 2026 is the state and local tax deduction, which moved from $10,000 to $40,400. It phases down by 30 percent of modified adjusted gross income above $505,000 but never falls below $10,000, and the higher cap is scheduled to revert to $10,000 in 2030. For a buyer in a high-property-tax state this changes the after-tax cost of ownership materially, and a great deal of published guidance still assumes the old cap.

Two things not to look for: there is no federal first-time homebuyer tax credit. The 2008-era credit is long gone, and the form associated with it now exists only to finish repaying it. What does exist is a narrow retirement-account exception: up to $10,000 lifetime from an IRA for a first-time purchase, used within 120 days. It does not apply to a 401(k), and it waives only the ten percent penalty — a traditional IRA withdrawal is still ordinary income.

When you sell

Up to $250,000 of gain is excluded for a single filer and $500,000 for a couple filing jointly. You must have owned the home at least 24 months of the five years before the sale and lived in it as your principal residence for at least 24 months of that same period; the months need not be consecutive and the two periods need not coincide. For a couple, only one spouse must meet the ownership test but both must meet the use test.

It can be claimed once every two years, not once per lifetime. And it is not indexed for inflation — $250,000 and $500,000 have been fixed since 1997, which for anyone who has held a home in an appreciating market for two decades is the single most consequential sentence on this page.

On rates

Mortgage rates are published weekly and move weekly. As of the week ending 10 September 2026 the average 30-year fixed rate was 6.76 percent and the 15-year was 6.09 percent. Any page quoting a rate without a date on it is quoting history, and a rate is not a quote — yours depends on credit, down payment, loan type and the day you lock.