Saving to buy a new home
Saving to buy a new home
Some extra costs you may not have expected
When saving to buy a home, consider that there might be more costs than you expect. Use this worksheet to estimate the major costs involved when buying a home.
Budgeting for home purchase
• Estimated purchase price for your home:
• Estimated closing costs (3% to 7% of home price):
• Down payment (20% of home price is suggested):
• Estimated moving expenses:
• Estimated costs for new furniture, appliances, etc.:
• Estimated cost for repairs or renovations (1% of home value per year):
• Current savings:
• Total amount to save:
How your down payment affects your overall mortgage costs
Different down payment amounts will have a big impact on the total cost of the loan, the interest rate of the loan and whether you have to pay private mortgage insurance (PMI) payments every month.
On a home that costs $250,000
If you put 5% down, or $12,500, your monthly PMI payment might be $96.98, your APR might be 6%, your total interest might be $275,115.70 and the total cost of the loan might be $512,615.70.
If you put 10% down, or $25,000, your monthly PMI payment might be $96.98, but your APR might be reduced to 5.5%, your total interest might be $234,909.09 and the total cost of the loan might be $459,909.09—a saving of more than $50,000 for just $12,500 more down.
If you put 15% down, or $37,500, your monthly PMI payment might be $86.77, but your APR might be reduced to 5%, your total interest might be $198,168.54 and the total cost of the loan might be $410,668.54—a saving of more than $58,000 for just $12,500 more down.
If you put 20% down, or $50,000, you wouldn’t have to pay PMI at all, your APR might be reduced to 4%, your total interest might be $143,739.01 and the total cost of the loan might be $343,739.01—a saving of more than $65,000 for just $12,500 more down.
These numbers are not representative of current rates and are meant to serve only as an example.
PMI is private mortgage insurance, which you may be required to buy if your down payment is less than 20%.
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