All Bell Bank locations and offices will be closed Monday, January 18, in honor of Martin Luther King Jr. Day. With the federal holiday, transactions after close of branch on Friday, January 15, will be processed on Tuesday, January 19.
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Closing costs – the fees charged when you take out a home loan – vary greatly, but they average between 2 and 5 percent of the home’s purchase price. On a $200,000 home, that’s roughly $4,000 to $10,000.
That’s a chunk of change that can seem prohibitive, especially if you’re already burdened with car payments and student loan debt. But it doesn’t have to keep you from owning a home.
There are down payment assistance programs to help first-time homebuyers. You can also save on closing costs at Bell Bank Mortgage, which does not charge an origination fee.
If you’re even thinking about buying a home, the first step you should take is to meet with a mortgage lender. They’ll talk about your goals and can answer questions like how much home you can afford and what your closing costs might be.
Next, start saving as much as you can. These tips can help you save $4,000 or more toward your closing costs in one year.
Set up your direct deposit to automatically put a certain amount of money into your savings account with each paycheck. Can you afford $50 a paycheck? That will give you $1,300 in a year if you’re paid every two weeks. How about $100 a paycheck for a savings of $2,600 in a year?
It rounds up every purchase you make and deposits the difference into your savings account. If you round up your purchases by $2, and you make 50 purchases a month, that adds up to savings deposits of $100/month or $1,200/year. Plus, Bell matches 5 percent of your ChangeSaver roundups, up to $250/year. That means Bell will add $60 to your $1,200 ChangeSaver savings.
If you don’t track your spending or follow a budget, it’s too easy to impulse buy. If you have a budget, are there places where you can cut costs?
Going out to lunch or a movie can seem a lot more fun than brown bagging it or watching a video at home. But in the end, being able to pay your closing costs and get into a new home is a lot more fulfilling. When you feel deprived at not being able to treat yourself to a unicorn Frappuccino, it helps to be able to see and touch a tangible representation of your goals.
Following all of these tips, you can save roughly $4,000-$6,000 in just 12 months. It will take dedication, but when you unlock the door to your new home, it will be worth the sacrifice.
Contact your mortgage lender today to discuss your options.
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