Leave a Message

Thank you for your message. We will be in touch with you shortly.

Homes for Sale in Kahului, HI

What You Need To Know About Saving for a Home in 2024

First Time Home Buyers Laura Miller Edwards Realty Group January 3, 2024

If you’re planning to buy a home, knowing what to budget for and how to save may sound intimidating – but it doesn’t have to be. One way to ease those concerns is to make sure you understand some of the costs you may encounter up front. And to do that, always turn to trusted real estate professionals. They can help you set a plan and take a strategic look at your budget and your process before you even get started.

Here are just a few things experts say you should be thinking about.

1. Down Payment

Saving for your down payment is likely top of mind as you set out to buy a home. But do you know how much you’ll need? While every buyer’s situation is different, there’s a common misconception that putting 20% of the purchase price down is required. An article from the Mortgage Reports explains why that’s not always the case:

“The idea that you have to put 20% down on a house is a myth. . . . The right amount depends on your current savings and your home buying goals.”

To understand your options, partner with trusted real estate professionals to go over the various loan types, down payment assistance programs, and what each one requires. The more you know ahead of time, the easier the process will be.

2. Closing Costs

Make sure you also budget for closing costs, which are a collection of fees and payments made to the various parties involved in your transaction. Bankrate explains:

Closing costs are the fees you pay when finalizing a real estate transaction, whether you’re refinancing a mortgage or buying a new home. These costs can amount to 2 to 5 percent of the mortgage so it’s important to be financially prepared for this expense.”

The best way to understand what you’ll need at the closing table is to work with a trusted lender. They can provide you with answers to the questions you might have.

3. Earnest Money Deposit

If you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). An EMD is money you pay as a show of good faith when you make an offer on a house. According to Realtor.com, it’s usually between 1% and 2% of the total home price.

This deposit works like a credit. It’s not an added expense – it’s paying a portion of your costs upfront. You’re using some of the money you’ve already saved for your purchase to show the seller you’re committed and serious about buying their house. Realtor.com describes how it works as part of your sale:

It tells the real estate seller you’re in earnest as a buyer . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.”

Keep in mind, an EMD isn’t required, and it doesn’t guarantee your offer will be accepted. It’s important to work with a real estate advisor to understand what’s best for your situation and any specific requirements in your local area. They’ll advise you on what moves you should make so you can make the best possible decisions throughout the buying process.

Bottom Line

When buying a home, being informed about what to save for is key. Let’s connect so you’ll have an expert on your side to answer any questions you have along the way.

 

This blog post previously appeared on https://www.simplifyingthemarket.com/en/2023/12/28/what-you-need-to-know-about-saving-for-a-home-in-2024?a=106260-312309902871c1f0d820820f58bf8fde. The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group do not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. and the Laura Miller Edwards Realty Group will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.


Recent Blog Posts

Stay up to date on the latest real estate trends.

A large white house with a lot of windows. The house has a slate roof and two attached garages.

For Sellers

What To Do When Your House Didn’t Sell

If your listing expired and your house didn’t sell, it’s totally natural to feel a mix of frustration and disappointment. And as you’re working through that, you’re pr… Read more

Home Inspections

The Difference Between an Inspection and an Appraisal

While you may have a general idea of what an inspection is, maybe you’re not sure why you need one or how it’s different from an appraisal. Here’s an explainer of each… Read more

Housing Market Updates

Housing Market Forecast: What’s Ahead for the 2nd Half of 2024

As we move into the second half of 2024, here’s what experts say you should expect for home prices, mortgage rates, and home sales.

Buying Tips

What You Need To Know About Today’s Down Payment Programs

There's no denying it's gotten more challenging to buy a home, especially with today's mortgage rates and home price appreciation.

Luxury Market

The Sweet Spot for Buying Luxury Homes

If you’ve been looking for a home at the high end of your market, but haven’t found the right one, you may have put your search on hold. But according to recent data, … Read more

For Sellers

What To Expect if You Buy or Sell a Home This June

June is a busy month in the housing market because a lot of people buy and sell this time of year.

Home Buying

The Biggest Mistakes Buyers Are Making Today

An expert’s insights will help you avoid some of the most common mistakes homebuyers are making right now.

A cozy living room with two gray-colored couches facing a fireplace.

Pricing

Your Agent Is the Key To Pricing Your House Right [INFOGRAPHIC]

The asking price for your house can impact your bottom line and how quickly it sells.

Selling Tips

What More Listings Mean When You Sell Your House

The number of homes for sale is playing a big role in today’s housing market. And, if you’re considering whether or not to list your house, today’s limited supply is o… Read more

Work With Us

Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact us today.