Saving for a house is a process, but with enough effort, you can make it work. However, you may be wondering where you should keep the funds during the saving process until the big purchase. You have a few options, depending on the timing of things.

House Fund Storing Tips

How Much Do You Need To Save?


The amount you need to put aside will really depend on the mortgage you get. You may be able to get away with only two to five percent of the total purchase price with some, but others may require you to put down at least 20 percent. Your financial situation also plays a role, as having a better credit score and less debt can help you out when applying for a mortgage. Regardless of how much you decide to set aside, you will need to make sure you are saving on a regular basis. One option is to look for ways to reduce your monthly expenses, which will allow you to put aside a certain amount on a regular basis. You might consider refinancing your existing student loans to a new one to cut back on expenses. That might even make it easier to get a mortgage when the time comes.

Savings Or Checking Account

Saving account

Setting up another account dedicated to your house fund is an easy solution, as it ensures the funds are separate and easy to access. You can easily move savings between accounts, and they are relatively safe. If a home purchase will happen within the next three to six months, this is often the best option, as the accounts are liquid enough. Look for a high-yield option that will help you earn some interest. Online-only accounts can be a good option, as the rates may be a little higher.

Putting The Funds In A CD

A certificate of deposit is a safe place to put the money, but it will lock the money in that account for anywhere from three months to five years, depending on how long of a term you want. The interest rate will be guaranteed for that amount of time, and usually, a longer-term gives you a higher rate. They are often higher than a savings account, but do your research and compare products from different financial institutions. Ensure that the time aligns with the timing of your home purchase.

Using An Investment Account

Investment Account

If you are saving far enough ahead of time, you may want to invest the funds to help them grow even faster. Of course, nothing is guaranteed, and it can be risky to use an investment account. Consider your risk tolerance when going with this method. Still, if you don’t mind market fluctuations and have the time, you could put at least some of your house fund into an investment account. Just make sure you have at least several months and perhaps even a number of years before you need to access the money. If the market experiences a downturn, you want to ensure you will have enough time to recover from that.

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