How Much Money Should I Save Before Buying a House?

Do you dream of owning a house someday? If so, you may be wondering how much money you’ll need to save before buying one. The total amount, of course, varies greatly from person to person.

Good Debt vs Bad Debt

According to Rocket Mortgage, the average American puts approximately 6% forward as a down payment, far from the preferred 20%. That’s only $6,000 for a $100,000 mortgage.

Good Debt vs Bad Debt

Average Down Payment On A House In America

If your credit history is poor or you cannot make a large down payment, this may be mandatory. You’ll need to check with your lender to see what options they offer, but you’ll likely pay for this unless you can afford to put 20% down in cash.

Private Mortgage Insurance

These fees cover the cost of the closing paperwork for the property. They also include legal fees, title searches, surveys, etc.

Closing Costs

Some loans require mortgage insurance premiums. These may be paid once per month and protect the lender and owner from damage to the property.

Homeowners Insurance Premiums

Property taxes can range anywhere from 0%-10% or even more, based on where you live and the home’s assessed value. It’s essential to consider these costs when deciding how much to save up before purchasing a home.

Property Taxes

Homes within communities often come with homeowner association fees. These fees go toward maintenance of common areas, landscaping, security, etc.

Homeowner Association Fees

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