What to Include in Your Home Savings Goal

Reaching the milestone of homeownership can be financially intimidating, particularly when you have to factor in all the costs. In this article, we provide you with an understanding of what is necessary for your home savings goal – down payment, commissions and closing expenses included! As a result, there will be no surprises as you steadily progress toward owning a property. Much like any feat worth accomplishing; preparation and knowledge are key components that allow us to reach our goals with confidence and assurance.

A Down Payment

One of the most significant expenses when purchasing a home is the down payment. This initial payment, typically ranging from 5% to 20% of the home’s purchase price, is required by most mortgage lenders to secure a loan. The larger the down payment, the lower your monthly mortgage payments will be, and the less interest you’ll pay over the life of the loan. Saving for a substantial down payment can help you secure more favorable loan terms and reduce the overall cost of homeownership. When creating your home savings goal, be sure to include a realistic target for your down payment based on your desired budget and local housing market.


When buying a home, it’s important to consider the commissions paid to real estate agents involved in the transaction. These fees, typically a percentage of the home’s sale price, are usually split between the buyer’s and seller’s agents. Depending on the value of the house, commissions may cost tens of thousands of dollars. Although these fees are often paid by the seller, they can still impact the overall price of the home. Therefore, it’s essential to factor in the potential cost of commissions when calculating your home savings goal.

Closing Costs

Another critical expense to consider when buying a home is closing costs. These fees, which can range from 2% to 5% of the home’s purchase price, cover a variety of services, such as title searches, appraisals, and loan origination fees. Closing costs can also include escrow and prepaid expenses like property taxes and homeowners insurance. It’s essential to save for these costs in addition to your down payment, as they can significantly impact your overall budget when purchasing a home. Be sure to research and estimate the potential closing costs in your area to include them accurately in your home savings goal.

Saving for a home involves more than just setting aside money for a down payment. By considering additional expenses like commissions and closing costs, you can create a comprehensive home savings goal that prepares you for the financial realities of homeownership. By planning for these costs and diligently saving, you can navigate the home-buying process with confidence and secure your dream home. Remember, the more informed you are about the costs involved in purchasing a home, the better equipped you’ll be to make sound financial decisions along the way.

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