Ready to achieve your dream of purchasing a new home? Before you decide how to save, you need to decide how much to save. Think about whether you want to pay cash for your home or get a mortgage loan, and if you're going to get a mortgage, decide how much of a down payment you'll need. Generally, the more you put down, the more negotiating and purchasing power you will have. Plus, depending on the type of mortgage loan, a down payment of at least 20% of the purchase price may help you avoid paying private mortgage insurance, which can save you a significant amount of money over time.
One way to save for a home is to open a separate account expressly for that purpose. Doing so is a common way to track your progress and make sure that money doesn’t get used for other purchases. Ally Bank offers a number of ways to save, whether you're purchasing a new home or saving toward another goal. Generally, there are three approaches to consider:
Make several small deposits. With this approach, you put as much as you can away as often as you can. Ally Bank’s Online Savings Account and the Money Market Account both work well for this purpose. Both offer a competitive interest rate and no monthly maintenance fees. The Money Market Account comes with the convenience of debit card and check access.
Make fewer large deposits. With this approach, you might wait until you have a relatively sizable sum to deposit, then use several CDs to reach your goal. Ally Bank offers a variety of different CD accounts that you can open and fund with any amount.
Choose a combination of both. You might consider starting with the Ally Bank Online Savings or Money Market Account, both of which offer a great annual percentage yield (APY). Then, once you've reached a relatively large balance, you can move that money into a CD, which generally will earn even more interest. That way, your money earns interest and also remains separate from your other funds right up until it's time for your purchase.
As you consider how to buy a new home, count on Ally Bank for convenient, easy and rewarding ways to save toward your goal. Visit AllyBank.com to learn more. Explore your options at Allybank.com or call live, 24/7 customer service at 877-247-ALLY (2559) today.
Ally Bank, member FDIC