How Much Money Do You Actually Need to Buy a House?
Let’s cut straight to it. One of the biggest reasons people don’t even start the homebuying process is this question right here:
“How much money do I actually need?”
And because most answers online are vague, scary, or just totally out of touch, we’re going to break it down in plain English — no fluff, no judgment, just clarity.
Down Payment: Not Always 20 Percent
You’ve probably heard you need 20 percent down to buy a house. That’s not wrong, but it’s also not a rule. It’s more like a tradition that a lot of people no longer follow.
Here’s the truth:
You can buy a home with as little as 3 percent down on a conventional loan. FHA loans go as low as 3.5 percent. And there are even programs out there with zero down if you qualify.
So on a $400,000 home, that means your down payment could be as low as $12,000. Not nothing, but way more doable than 80 grand.
Closing Costs: The Part No One Warns You About
In addition to your down payment, you’ll need to budget for closing costs. These usually run between 2 to 5 percent of the purchase price.
On that same $400,000 home, closing costs could be around $8,000 to $20,000. But don’t panic. There are ways to negotiate with the seller or build those into the loan in some cases. We can help you figure out what’s possible in your market.
Other Upfront Costs to Keep in Mind
Here’s what else you might need cash for:
Home inspection: usually a few hundred bucks
Appraisal: often around $600
Moving expenses, deposits, or furniture: optional but real
These aren’t loan-related, but they’re part of the picture when it comes to how much cash you’ll want to have on hand.
Wait... So How Much Do I Actually Need?
That’s going to depend on your loan type, your price point, and your goals. But here’s a ballpark breakdown:
Low down payment scenario:
3 percent down on $400,000 = $12,000
2 percent closing costs = $8,000
Inspection and extras = $500 to $2,000
Total cash needed: about $20,000 to get in the door
Now let’s say you’ve got a gift from a family member or a down payment assistance program. That number drops fast.
The Bottom Line
Buying a home doesn’t require perfection or piles of cash. It just requires planning and a solid strategy. You don’t need to save endlessly or guess your way through it.
The best move? Talk to someone who can lay out the real numbers based on your situation. That way, you know what to aim for and can stop wondering if you’re “ready” and start making a real plan.
Not sure how much you need to save? We’ll help you build a plan that works. Let’s Talk!
