Saving for a new home can seem like a challenge, especially for first-time buyers. But, what kind of numbers really come into play? We look at down payments, mortgage insurance, closing costs, and more!
How Much Should You Save for a House Down Payment? It all depends on the price of the home you want to buy and what type of loan program you qualify for. Down payments are usually a percentage of the home cost.
Here’s a look at some common mortgage options and how much you might need to have for a down payment:
➤CFPB notes that conventional loans with PMI can require 5 to 20% down on average.
➤Loans through the Federal Housing Administration (FHA) require down payments of at least 3.5%.
➤Those who qualify for loans through the VA can put as little as 0% down.
Other Expenses to Save for Down payments aren’t the only thing you need to save for when buying a home. Closing costs can be thousands of dollars, and you may need to foot the bill for inspections, home repairs, or even fun things like new furniture. To make the home-buying process less stressful, it’s a good idea to keep a few months of reverses of your proposed mortgage payments.
Start Saving Today:
Do your research early, make a plan and stick with it. Don’t leave yourself cash poor, leave reserves to buy things you need for the house.