Saving for a home and other big goals is the discipline of funding the expensive, joyful, life-changing purchases that arrive on a 3-to-5-year clock rather than a 30-year one — a down payment, a car, a wedding, a child's tuition. Getting this right matters because the wrong savings vehicle or the wrong pace can quietly sabotage the goal itself: money left in the stock market can lose a fifth of its value right before closing day, and money never separated from checking gets spent on smaller things instead. The idea that makes everything else click is that time horizon, not goal size, decides where the money lives — the same $30,000 target calls for a completely different account depending on whether the wedding is 8 months away or the house is 4 years out — and a big goal rarely competes with retirement in isolation, since skipping an employer match to save faster is its own hidden cost.
What This Cheat Sheet Covers
This topic spans 12 focused tables and 94 indexed concepts. Below is a complete table-by-table outline of this topic, spanning foundational concepts through advanced details.
A jump-to index of every table row in this cheat sheet.
An interactive map of every table and concept in this topic.
Table 1: Sizing Your Down Payment & Avoiding PMI
The size of a down payment does more than set the monthly payment — it decides whether private mortgage insurance gets added on top, and how fast it comes back off. These are the mechanics behind that 20% number everyone quotes.
| Concept | Example | Description |
|---|---|---|
$400,000 home × 20% = $80,000 down | The traditional benchmark that keeps the loan-to-value ratio at 80% or below, which avoids PMI on a conventional loan entirely. | |
$270,000 loan → PMI ≈ $111/month | Required by conventional lenders whenever the down payment is below 20%; added to the monthly payment until enough equity builds up. | |
$300,000 original value × 78% = $234,000 balance | Under the federal Homeowners Protection Act, the servicer must drop PMI automatically once the loan is first scheduled to reach 78% of the home's original value, as long as payments are current. | |
Written request once balance ≈ 80% of original value | A borrower in good standing can request cancellation two years earlier than the automatic termination point, once the balance reaches 80% of original value. | |
80% first mortgage + 10% second loan + 10% down | Splits financing into two loans so the first mortgage stays at or below 80% LTV, sidestepping PMI without a full 20% down payment. |