{"id":41515,"date":"2020-05-21T12:45:51","date_gmt":"2020-05-21T20:45:51","guid":{"rendered":"https:\/\/www.credible.com\/blog\/?p=41515"},"modified":"2023-03-21T10:40:07","modified_gmt":"2023-03-21T17:40:07","slug":"how-to-save-for-a-house","status":"publish","type":"post","link":"https:\/\/www.credible.com\/blog\/mortgages\/how-to-save-for-house\/","title":{"rendered":"How to Save for a House"},"content":{"rendered":"

Buying a home can be expensive, but that doesn\u2019t mean it\u2019s an entirely out-of-reach goal \u2014 regardless of what your income might be. Really, it\u2019s just a matter of saving and spending carefully.<\/p>\n

If you\u2019re hoping to become a homeowner soon, here\u2019s how to save for a house:<\/b><\/p>\n

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  1. Know what costs to expect<\/a><\/li>\n
  2. Understand what you can afford<\/a><\/li>\n
  3. Pay down debt<\/a><\/li>\n
  4. Automate it<\/a><\/li>\n
  5. Find areas for temporary cutbacks<\/a><\/li>\n
  6. Have a dedicated savings account<\/a><\/li>\n<\/ol>\n

    <\/a><\/p>\n

    1. Know what costs to expect<\/h2>\n

    The first step is to understand what costs you\u2019re facing as a homebuyer. Sure, there\u2019s the down payment<\/a> and closing costs to worry about, but there are also several other costs.<\/p>\n

    Here\u2019s a quick look at the typical expenses you can expect when buying a house:<\/b><\/p>\n\n\n\n\n\t\n\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t
    Expense<\/strong><\/th>Interest rate<\/strong><\/th>\n<\/tr>\n<\/thead>\n
    Closing costs<\/strong><\/td>2% to 5% of your home\u2019s purchase price<\/td>\n<\/tr>\n
    Min. down payment<\/strong><\/td>FHA loan:<\/strong> 3.5% of purchase price
    \nConventional loan:<\/strong> 3%
    \nVA loan:<\/strong> $0
    \nUSDA loan:<\/strong> $0<\/td>\n<\/tr>\n
    Moving costs<\/strong><\/td>Local:<\/strong> $550 to $2,000
    \nLong distance:<\/strong> $2,000 to $7,500<\/td>\n<\/tr>\n
    Emergency reserves<\/strong><\/td>2 to 12 months of mortgage payments, homeowners insurance, taxes, and other costs in case you lose income<\/td>\n<\/tr>\n
    Inspection fee<\/strong><\/td>$300 to $500<\/td>\n<\/tr>\n
    Property taxes<\/strong><\/td>Varies by location<\/td>\n<\/tr>\n
    Homeowners insurance<\/strong><\/td>$828 to $1,498 per year on average<\/td>\n<\/tr>\n
    Mortgage insurance<\/strong><\/td>FHA loan:<\/strong> 1.75% of your loan balance upfront and 0.45% to 1.05% annually
    \nConventional loan:<\/strong> $30 to $70 per month for every $100,000 borrowed<\/td>\n<\/tr>\n
    HOA dues<\/strong><\/td>$200 to $300
    \n(monthly average)<\/small><\/td>\n<\/tr>\n
    Utilities<\/strong><\/td>Varies<\/td>\n<\/tr>\n
    Maintenance and repairs<\/strong><\/td>$1,105
    \n(annual average)<\/small><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n

    <\/a><\/p>\n

    Find Out: Should I Rent or Buy? How to Make the Best Choice<\/a><\/strong><\/em><\/p>\n

    2. Understand what you can afford<\/h2>\n

    You also need to know how much house you can afford \u2014 both on a monthly basis, as well as annually. Monthly costs will include your mortgage payment and utility costs, for example, while annual costs will likely be repairs, maintenance, property taxes, and HOA dues. Keep in mind, though, that if you use a mortgage<\/a> to buy your home, your lender might collect property taxes and HOA dues in the monthly payment to hold in the escrow<\/a> account.<\/p>\n

    Find out how much you\u2019ll owe over the life of your mortgage using our home loan calculator below.<\/p>\n

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    Enter your loan information to calculate how much you could pay<\/span><\/p>\n\n

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