Buying a new home should put a smile on your face, and saving beforehand can make it even wider.
"For most Americans, your home is gonna be your biggest investment. So if you can put more money into it when you purchase it, that's a good idea," Larissa Cable, a mortgage lender with Lubbock National Bank said.
That good idea will end up leaving more cash in your bank account. Cable says not only will a large downpayment lower your monthly mortgage payment, it may also get you a better interest rate and help avoid bank fees.
"The more money you put down, the lower the monthly mortgage insurance is. And if you put 20 percent down, you don't have to pay monthly mortgage insurance at all," Cable said.
Not everyone can afford 20 percent. Infact, lenders say it's more common for home buyers to save 3 to 5 percent, especially if it's their first time to purchase.
"Typically most people have some money saved, and they've been working toward a goal. Once they come in, we look at what's going to be most beneficial for them, Cable said.
She suggests talking to your local banker before you even begin to house hunt to get pre-approved. For those with good credit scores, she also says to strike now while the rates are hot.
"If you're on the fence, there are enough incentives out there to realize it's time to go ahead and buy," Cable said.
If you need any more push to start putting money aside, ideal candidates who get out of that mortgage insurance can save up to several thousand dollars per year.
