- Steps to getting a mortgage infographic
- How does a mortgage work? video
- Your credit score: A key part of your financial identity infographic
- How much home can you comfortably afford? video
- Budgeting to buy a home infographic
- Planning for extra costs when buying a home video
- What makes up a mortgage payment video
- KEY TAKEAWAYS
Budgeting to buy a home
Budgeting to buy a home
Creating a workable budget is the first step toward saving to buy a home.
To figure out what you’ll need to save, start with the estimated price of your home. Fill in this worksheet with some help from your lender to estimate the closing costs and monthly payments. Add that to your down payment and that’s what you’ll need to save.
Step 1: Savings needed for your home purchase
Add up the following:
First monthly payment
Closing costs (3% to 7%)
Down payment (5% to 20%)
Step 2: Monthly expenses
Add up the following expenses:
• Gross annual income
• Monthly net income
• Mortgage/rent payment
• Personal debt
• Long-term savings
• Health care
• Personal care
• Pet care
• Monthly savings
Step 3: Savings goal
Savings Goal minus Current Savings divided by Monthly Savings equals Months to Reach Savings Goal
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Step 1: With some help from your lender, estimate the closing costs and monthly payments. Add that to your down payment and that’s what you’ll need to save.
Step 2: Creating a workable budget is an important step toward saving to buy a home. Take your monthly net income and subtract all of your monthly spending to see how much you can save each month.
Subtract what money you have from the amount you’ll need, then divide that by how much you can save each month. That will give you the number of months it’ll take to save for your home.
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