The average amount is 3% to 6% of the price of the home.
Given that range, it’s a wise idea to start with 2%-2.5% of the total cost of the house, in savings, to account for closing costs.
Thus our $300,000 first-time home buyer should sock away about $6,000-$7,500 to cover the back end of their buying experience.
How much money should I save before buying a house?
Saving 20% of your income could catapult you into purchasing a home in the next 12 to 16 months, depending on your market. For example, if you’re earning $96,000 per year, that’s $19,200 saved after one year. $28,800 saved after a year and six months, which can be plenty of funds to make home-ownership a reality.
How do I save money for my first house?
If you’re saving for a house, here are simple, straightforward steps to get you started.
- Decide on Your Budget. Prior to even looking at homes, decide what amount you can comfortably afford.
- Pay Down Your Debts.
- Pay Your Future Mortgage.
- Pay Yourself First.
- Reduce Your Expenses.
When should I buy my first house?
The first thing to do before buying a home is to make sure it’s the right time to do so. Generally speaking, owning a home pays off financially if you will live in it for at least five years. Otherwise, there’s nothing wrong with renting.
How much should I save for a townhouse?
Summary
| Down payment | 10% of $200,000 | $20,000 |
|---|---|---|
| Prepaid expenses | 2% of $180,000 | $3,600 |
| Utility adjustments | Estimated | $500 |
| Cash reserves | $1,200 mortgage payment x 2 | $2,400 |
| Total cash required | $31,000 |
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