When you buy a new house, you may need to put down thousands of dollars in closing costs and come up with even more money for a down payment. Saving such a substantial amount of money requires a strategic plan and the determination to follow through on that plan. What does it take to save money for a new house?
The first step is to determine how much money you need to save. This involves estimating closing costs, which may be three percent or more of the sales price. You also need to decide how much money you want to use as a down payment. Once you have a savings goal in mind, determine what your timeframe is for your purchase. To complete this step, you must decide how much money you have available to save on a monthly basis.
To ensure that you stick to your savings plan, a smart idea is to automate your savings. If you do not already have a high-interest savings account, you should consider opening an account. Then set up an automated funds transfer. The best time for most people to automatically transfer funds in a savings account is on the day they get paid. This prevents you from spending the money before you can stash it in your savings account.
Do you want to speed up the process? You may be able to find more money to save regularly by reducing your monthly expenses or by picking up a side hustle. You could also pay down high-interest credit card debt and take other effective steps to scale back.
The loan program that you qualify for will determine what your closing costs and minimum down payment requirement are. To explore your home loan options, . our loan origination team at MortgageDepot today.
Connect with one of our loan consultants to learn more.