If you’re familiar with the home-buying process, you know that buying a house typically requires a 20 percent down payment. How can you save for this down payment? Let’s say the home costs $500,000. That means you’ll need to have $100,000 ready to go when you start the mortgage process.
Some home loan can be financed through FHA that requires you to pay less down payment. But typically, a 20% will ensure a better rate and faster loan approval. Moreover, if you don’t have 20 % to pay upfront, you’ll need to purchase private mortgage insurance, or PMI, which basically reimburses the lender if you default on your loan.