Saving for a House Made Simple

4 expenses to include in your budget

Factor these out-of-pocket expenses into your budget as you determine your home price range.

1. Down payment

In previous decades, 20% down was often considered the norm, but many mortgage programs today allow far more flexibility.

According to Bankrate, as of 2025 the median down payment by U.S. homebuyers is $54,310, which corresponds to about 15 % of the median home price.

For first-time buyers, the median down payment in recent years has hovered around 3%, while repeat buyers tend to contribute more. (Source: LendingTree)

As you decide on your down payment amount, keep in mind that it may affect whether mortgage insurance is included in your monthly payments. Ask your lender for details so you can evaluate your short-term and long-term expenses.

2. Mortgage points

This is an optional fee to lower your interest rate. It increases your initial out-of-pocket costs but reduces the amount of interest you pay over the life of the home loan.

Ask your lender to run loan scenarios with and without points so you can determine what makes the most sense for your financial situation.

3. Additional closing costs

Here are some additional fees you may incur during the real estate transaction. Specific fees vary by state, city, lender, and other services.

Some costs are paid prior to the official closing date. You’ll want easy access to your funds as you get ready to put in your offer.

• Appraisal and inspection fees – some are required, and others are optional depending on your local laws and loan guidelines.

• Lender fees – these vary but may include credit report, courier, origination, application, or underwriting fees.

• Property-related fees – such as title search, title insurance, and survey fees.

• Escrow funding – ensuring your escrow account can cover upcoming insurance and tax bills.

Average closing costs for buyers typically range from 2% to 5% of the loan amount, which amounts to around $8,000 to $21,000 on a median-priced home in the first quarter of 2025. (Source: Business Insider)

4. Post-purchase expenses

Once you’ve bought your home, it’s time to make it your own. It’s a fun process, but the expenses can quickly add up!

Plan for the following:

• Repairs – such as paint, flooring, or even plumbing or electrical updates.

• Moving – include packing supplies, vehicle rentals, and moving services.

• Appliances – you may need to purchase a refrigerator or washer and dryer set.

• Furniture – new furniture might work better with your new floor plan.

• Decorations – budget for window coverings, mirrors, and other decorative elements.

Maximize your savings

You work hard for your money. Here are five ways you can make the most of your savings as you get ready for your upcoming house hunt.

1. Open a high-yield savings account

Interest can add up quickly, especially when it’s compounded daily. Shop around for a high-yield savings account that offers a competitive rate to help your home fund grow faster.

Bonus tip: Keep saving even after you’ve bought your home. Having extra funds available can help cover emergency repairs or unexpected expenses.

2. Get prequalified for a loan

Mortgage pre-qualification helps you understand what you can afford. You’ll share your financial details with your lender to estimate your purchase price and loan terms. Because no credit report is pulled, it’s fast and doesn’t affect your credit score.

This step can be done well before you’re ready to buy and is a great way to validate your budget and clarify questions about down payments or closing costs.

3. Secure a preapproval

Once you’re ready to start looking at homes, getting preapproved shows sellers, you’re a serious buyer and helps you make stronger offers.

Ask your lender to compare loan scenarios so you can decide what works best — whether that means adjusting your down payment, paying points, or rolling closing costs into your loan.

4. Work with a real estate professional

Around 89% of homebuyers purchase their homes through a real estate agent or broker, according to The Close. A qualified agent can help you navigate the market, negotiate a fair price, and avoid costly mistakes.

Buyers typically don’t pay out-of-pocket for their agent’s services. While you might consider using the seller’s agent to save money, most experts agree it rarely results in additional savings.

5. Negotiate with the seller

If your inspection reveals repairs needed, ask the seller to cover the costs. You can also request that the seller split closing costs or provide a home warranty that covers a year of major systems and appliances.

Your ability to negotiate depends on the market and the strength of your offer, which is another reason why having a trusted buyer’s agent can make a difference.

Start planning for your new home

Saving for a house takes commitment and careful financial planning. By understanding every cost that comes with buying a home, you can create a solid budget that supports your long-term homeownership goals.

From opening a high-yield savings account to working with a trusted real estate professional, each step you take now brings you closer to the home you want with confidence and financial peace of mind.

When ready, connect with your lender to explore options, estimate costs, and find a mortgage that fits your budget.