2. Save For Your Down Payment & Closing Costs In addition to knowing how much you can afford on a monthly mortgage payment, understanding how much you’ll need for a down payment and your closing costs is another critical step. What Is a Down Payment? According to Bankrate: “A home down payment is simply the part of a home’s purchase price that you pay up front and does not come from a mortgage lender via a loan.” Thankfully, there are many different down payment assistance resources in the market to potentially reduce the amount you may need to put down on your home purchase. What Are Closing Costs? Trulia says: “ When you close on a home, a number of fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more .” If you’re concerned about saving for these items, start small and be consistent. A little bit each month goes a long way. Jumpstart your savings by automatically adding a portion of your monthly paycheck into a separate savings account or house fund. AmericaSaves.org says: “Over time, these automatic deposits add up. For example, $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded.” Before you know it, you’ll have enough in your savings if you’re disciplined and thoughtful about your process. Bottom Line If homeownership is on your wish list this year, take a look at what you can prioritize to help you get there. Let’s connect to determine the steps you should take to start the process today.
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