Where You Should Store Your Down Payment Funds

One of the first major steps that towards buying your first home is saving enough money for a down payment. It’s easier said than done, because the down payment is going to be a certain percentage of the entire cost itself. It’s important to keep a fund where you can deposit your money that goes straight towards your future home.

For a down payment, you’re typically going to want to look to save until you have about 20% of the asking price of the house. If you have excellent credit, you might be able to obtain a mortgage with less than 20% down.

Once you’ve calculated how much you’re going to save, then you’re going to need to decide what type of account you want to store your money.

Savings Account

One of the most commonly known and basic types of accounts is a standard savings account at the same bank that you have your checking. This is an easy and quick process that’s a good way to store your money. The downside is that these banks typically have low interest rates.

Investment Account

Investment accounts are riskier but can also reap some huge gains for your savings. With an investment account, you can buy funds, bonds, and stocks that pay at a high interest rate – remember that the market will constantly fluctuate.

The Bottom Line

While saving up for your down payment, consider these accounts so that you can keep track of how much you’re putting in and tracking how close you are to your goal.

Bio: Kuba Jewgieniew is the CEO of Realty ONE Group, a real estate brokerage firm with offices in California, Nevada, and Arizona.