First-time Homebuyer 101: Savings

First-time Homebuyer 101: Savings

You cannot buy a house without saving up first. But, how much do you need to save? And, how do you do it?

Typically, a mortgage will require:

  • A down payment
  • Closing costs

🎯 You should aim to save up at least 5% of your target home purchase price to cover your up-front costs when you buy.

💀 The 20% down payment is dead. There are excellent mortgage products with down payment options as low as 3% (and in some cases even 0% for qualifying buyers). Talk to a lender to understand what programs are available for you.

What about down payment assistance (DPA) programs? DPA can be a great option for qualified buyers. 

😊 Wondering which DPA programs you are eligible for? Gravy’s homebuyer success team can tell you. Just ask us in the app!

What are closing costs? All of the other expenses, on top of the down payment, you’ll need to cover to close on your mortgage. 

👉 Closing costs are typically 2% to 4% of the purchase price, depend on several factors (e.g. location, loan type, lender, and purchase price), and include insurance, taxes, and other fees (e.g. inspection, lender, application, credit, HOA, etc.).

How do I save up for my first house while renting? Let us help! We’ll help you set a smart savings target and then hit it. With Gravy’s savings tool, you can link and track your down payment via existing savings accounts. Plus, you’ll earn Gravy Rewards along the way to save big on closing costs.

Get started right from the Gravy app! Begin saving up for homeownership today (it’s free).

❤️ Gravy partner lenders exclusively redeem Gravy Rewards, which can save you up to 1.0% of your loan amount (e.g. $2,500 on a $250,000 mortgage) as a credit on your closing costs. That means you will save faster, buy sooner, and work with the best lenders. Win-win-win.

Check out our other first-time homebuyer guides:

Will Dunn
Will Dunn
Gravy Co-Founder and Chief Growth Officer
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