Homeowners association dues
Fees paid monthly to cover the maintenance and amenities of a condominium complex or neighborhood.
One of the main things you can do to prepare for homeownership is save money for a Glossary Term: down payment. The more you can contribute (or “put down”), the more attractive you’ll be to Glossary Term: lenders. In addition, you’ll borrow less, which means you’ll pay less in Glossary Term: interest expenses over the life of your loan.So how much of a down payment will you need? That depends on the purchase price of the home you would like to buy and your loan program. The down payment is a percentage of the home’s purchase price, and different loan programs require different minimum down payments. If you can put down at least 20% on a Glossary Term: conventional loan, you will not have to pay Glossary Term: private mortgage insurance (PMI). If you can't put at least 20% down, ask your lender how much your monthly mortgage payment will be, including private mortgage insurance and determine whether this is a good option for you. Speaking with a mortgage professional about requirements to qualify for a home loan could help you figure out where you stand and set goals for your future.
There are several steps you can take to get your down payment savings started. Or if you’ve already been saving, there may be ways to help grow your down payment faster.
When you start saving for your down payment, it’s a good idea to keep your down payment fund separate from the rest of your money. If you are a Bank of America Online Banking customer, you can start saving for a down payment with the Save for a Goal tool, which can be accessed via the Budgeting & Reports tab of My Portfolio within Online Banking. Save for a Goal enables you to set up, manage and track your down payment savings goals and progress.
There are several ways you can add small amounts to your savings account on a regular basis so that saving is part of your routine:
Money market accounts: Set up a Glossary Term: money market savings account through your bank or other financial institution. They’re easy to set up and maintain, provide easy access to your money, and are insured by the FDIC up to $250,000Footnote 1.
Certificates of Deposit (CDs): If you plan on waiting a while to access your down payment savings, consider a CD. You should be able to get a higher rate of return than you would with a money market account. Find one with terms that fit your time frame, so you don’t get charged a penalty for early withdrawal.
Homebuyer tip: Ask your lender if they participate in down payment assistance programs and whether you may qualify.