Unless you have hundreds of thousands of dollars to spend, you most likely will work with a bank to finance your home purchase. Thus, the two main costs you need to save up for are down payment and the closing costs.
When financing a home purchase, there are several closing costs, such as an appraisal fee, termite inspection, and escrow fee. However, unlike a down payment, a homebuyer won’t know the exact dollar amount due until a few weeks or days before closing on the property.
Although moving expenses are not as large as a down payment, it is still a cost that buyers should save up for. If you have a small family and only have small items, you can save a lot of money by transporting your family’s personal belongings in your car or a friend’s truck.
Home borrowers that make a down payment of less than 20% are typically required to pay for private mortgage insurance (PMI).The purpose of a PMI is to protect a lender if a borrower defaults on their payment.
1. Track Your Expenses2. Create a Budget3. Automate Savings4. Reduce Expenses5. Increase Your Income6. Postpone Major Activities7. Get Rid of Debt8. Save Your Windfall Income9. Sell Your Things10. Pause or Reduce Retirement Contribution