If you’ve mastered Savings Fundamentals one through four, and you are now thinking about saving towards a down payment on a home, here are some tips to get you started.
Down payment tips.

  • To estimate what you’ll need for a down payment, get an idea of the purchase price and what type of monthly mortgage payments you can afford. The general rule of thumb is to pay no more than 28% of your gross income on principal, interest, property taxes and insurance.
  • Determine a timeframe of when you’d like to start shopping for a house. Then, over time, adjust your investment risks accordingly; the closer you are to buying, the less risk you’ll want to assume. Ideally, the investment type you pick should depend on both risk tolerance and time horizon.
  • Avoid tapping tax-deferred retirement accounts. Use taxable accounts to put savings toward your major purchase goals
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing.
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