Saving for Down Payment
Saving for a down payment can be difficult but the end result makes it all worthwhile.
1. Determine How Much You Will Need
The first step is to set a goal. Once you have determined the price range of the home you wish to purchase the minimum down payment you will require is established (purchase price x 5%). Added to this amount is the amount you will require for closing costs and other expenses related to the purchase and the move. To see more on this, go to our section on Other Costs at Closing.
2. Pace Your Savings
Now you have to determine how soon you want to purchase. If you wish to purchase your home in a year you simply take the amount you will require for a down payment, add the amount you have determined you will require to cover closing costs and other expenses related to the purchase. Divide this by the number of months until the purchase date and you have the amount you will have to put aside to reach your goal of home ownership.