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How to Save for Homebuying Expenses

Photo of contemporary living room on blog post, "how to save for homebuying expense".

Tip 2: Save for Homebuying Expenses

In the previous blog posts in our “Top 10 First-Time Homebuyer Tips” series, we discussed Determining your Ideal Budget. Tip two in our Home Buying Series is to “Save for Homebuying expenses”. Some of the expenses when purchasing a house includes the following: down-payment, closing cost, home inspections, appraisal, and earnest money.

Contents hide
1 Tip 2: Save for Homebuying Expenses
1.1 Homebuying Expenses:
2 Tips to save for a home
2.1 1. Determine How Much You Need to Save
2.2 2. Open a Dedicated Savings Account
2.3 3. Automate Your Savings
2.4 4. Make Extra Payments When Possible
3 ADDITIONAL BUYER’S TIPS
3.1 Donelson? The East Nashville Vibe—With A Better Price Tag
3.2 Why Madison TN is the Best Move for 2025
3.3 Partner Spotlight: Providence Title, LLC

Homebuying Expenses:

  • DOWNPAYMENT: A down payment is typically between 3-20% of the purchase price of the home. If you can put down more it would decrease your monthly mortgage payment. I work with a lot of First Time Home Buyers and I understand that oftentimes you don’t have the entire 3.5% to put down on your home. There are down-payment assistance programs that can help, keep in mind that it may increase your monthly mortgage payment.
  • CLOSING COST: Closing cost is the fees associated with finalizing your home purchase. This includes the lender’s fees, title insurance, and other miscellaneous fees.
  • HOME INSPECTION: A home inspection is a visual examination of the overall condition of a property. You should always get a home inspection even if you are purchasing a brand-new home! The cost of the inspection is the responsibility of the buyer and is not refundable. Outside of traditional home inspections, some buyers also have termite and radon inspections.
  • APPRAISAL FEES: The appraiser will visit the property to confirm the value of the home.
  • EARNEST MONEY: This is a deposit that shows you are serious about purchasing a home. It is typically 1-2% of the purchase price and is held in escrow until closing.

Saving for these expenses can be difficult, but there are a few ways to help make it easier. Here are some initial steps you can take to save for your dream home.

Tips to save for a home

1. Determine How Much You Need to Save 

The first step is to figure out how much money you need to save for your home expenses. As mentioned earlier, the standard down payment is 20 percent of the home’s value. However, there are programs available that allow for a lower down payment, such as 3 percent or 5 percent. 

Once you know how much you need to save, you can start creating a budget and looking for ways to cut costs so that you can divert more money toward your savings goal. 

2. Open a Dedicated Savings Account 

Once you know how much you need to save, open up a dedicated savings account that will be used solely for your down payment fund. This will help you keep track of your progress and resist the temptation of dipping into the account for other purposes.  

3. Automate Your Savings 

One of the best ways to make sure that you stay on track with your savings goals is to automate your savings. This means setting up automatic transfers from your paycheck or checking account into your dedicated savings account. This way, you’ll never even see the money and will be less likely to spend it on other things. 

4. Make Extra Payments When Possible 

If you get a bonus at work or come into some extra money somehow, resist the urge to spend it all immediately. Instead, put as much of it as possible towards your homebuying fund so that you can reach your goal even faster. 

Avoid excess spending in general and put any extra money you have towards your savings so that you can reach your goal more quickly. 

Saving for a home doesn’t have to be impossible. By following these tips, you can make the process a lot easier and less stressful. And, before you know it, you’ll have saved up enough for your dream home. 


ADDITIONAL BUYER’S TIPS

Restaurant in Donelson, Nashville TN area.

Donelson? The East Nashville Vibe—With A Better Price Tag

Photo of the front of the office of Madison Chamber. With a view of Harken Hall on Madison Blvd.

Why Madison TN is the Best Move for 2025

Photo of Providence Title, LLC. They are title company in Nashville, TN

Partner Spotlight: Providence Title, LLC

Shameka Britton is a real estate licensee affiliated with Compass RE, a licensed real estate broker and abides by equal Equal Housing Opportunity laws.

About Shameka Britton

Shameka Britton, REALTOR®-COMPASS RE
Experience the power of personalized real estate guidance in Middle TN! I'm not just your agent, but your advocate, consultant, and partner. My mission is to educate you, guide you, and ensure your journey to homeownership is seamless. For world-class service that extends beyond the transaction, contact me, Shameka Britton, at [email protected] or 615-395-6089

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Shameka Britton, REALTOR®
Affiliate Broker | Compass RE
3990 Hillsboro Pike, Suite 320 & 340, Nashville, TN 37215
o: 615.475.5616
m: 615.395-6089

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Shameka Britton is a real estate agent affiliated with COMPASS RE, a licensed real estate broker and abides by all applicable Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Some or all of the listings may not belong to the firm whose website is being visited. Nothing herein shall be construed as legal, accounting or other professional advice outside the realm of real estate brokerage.