Mortgages - Saving for your Purchase FAQs

As a general rule of thumb, you’ll need to have enough money at closing for a mortgage down payment, one year of taxes, and first year of insurance expenses. This comes to roughly 10% of the purchase price for most buyers, but this varies on a number of conditions. Your Mortgage Originator can give you additional information based on your specific goals and needs.

Housing expenses are often one of the largest monthly expenses for individuals. Working with a homeownership counselor, like The Housing Council, can help you create a budget and manage a savings plan that’s realistic for your specific goals and needs.

A savings account insured by the NCUA or FDIC is your safest option to build your down payment savings. Many lenders offer savings account options that offer greater rates with higher balances. You want to avoid tying up your funds in a risky investment with the potential to lose some of your savings.

Creating a budget and managing your monthly expenses are important practices to better your financial health. There is no silver bullet to saving more quickly, but sticking to a budget and managing your monthly expenses can help you build your savings. Working with a homeownership counselor, like The Housing Council, can help you prepare your finances for homeownership.

Rent-to-own agreements do exist, but the terms of these contracts can vary significantly from rental or mortgage commitments. It may be helpful to work with a homeownership counselor, like The Housing Council, before considering a rent-to-own option.