Shopping for a home is without doubt one of the greatest monetary choices you’ll ever make, and it’s not simply concerning the sale value. From the down cost to closing prices, there are a number of different bills to contemplate. So, how a lot cash do you really want to purchase a home? Whether or not you’re shopping for a home in Seattle or a dwelling in Denver – this Redfin information will break down each main value that can assist you finances successfully and keep away from surprises.
How a lot cash do I want to purchase a home?
You don’t want to save lots of 25% to 30% of a house’s value to turn out to be a house owner. In actual fact, many consumers, particularly first-timers, put down far much less.
As a normal rule, saving 10% to fifteen% of the acquisition value is a brilliant purpose. That ought to cowl your down cost and closing prices, whereas providing you with a cushion for shifting and different preliminary bills.
We’ll use the median U.S. dwelling value—about $440,000 as of June 2025—as a benchmark for estimating how a lot cash you’ll want to purchase a home.
Estimated financial savings wanted for a house at totally different value factors
| House Value | 10% Down | Closing Prices (3%) | Estimated Financial savings Wanted |
| $300,000 | $30,000 | $9,000 | ~$45,000 |
| $440,000 (nationwide avg.) | $44,000 | $13,200 | ~$66,000 |
| $600,000 | $60,000 | $18,000 | ~$90,000 |
Key prices of shopping for a house
Some prices are due earlier than or at closing, whereas others (like mortgage funds or HOA charges) kick in after you’ve moved in. Right here’s a breakdown of crucial prices you’ll have to cowl:
- Earnest cash deposit
- Down cost
- Closing prices
- Pay as you go prices (taxes, insurance coverage, curiosity)
- Transferring prices
- Mortgage funds
- Mortgage insurance coverage (if relevant)
- HOA charges (if relevant)
Upfront homebuying prices
Whereas a few of these prices are paid after the sale is accomplished and also you’ve already moved in, some bills are due earlier than you get the keys. Listed here are a number of the key upfront homebuying prices you ought to be conscious of:
| Homebuying Price | Price Breakdown (% of sale value) | Complete Price ($440,000 home) |
| Earnest cash deposit | 1%-3% | $4,400-$13,200 |
| Down Cost | 3%-20% | $13,200-$88,000 |
| Closing prices | 2%-5% | $8,800-$22,000 |
| Transferring prices | – | $1,250-$5,000+ |
Earnest cash deposit
Earnest cash is paid after a vendor accepts your provide on a home. The earnest cash deposit assures the vendor that you simply’re performing in good religion as a purchaser. The cash serves as a type of compensation if you find yourself backing out of the deal and not using a legitimate cause. It sometimes ranges from 1% to three% of the house value. For a $440,000 dwelling, count on to pay $4,400 to $13,200. This quantity is often utilized towards your down cost or closing prices.
Down cost
Your down cost is a proportion of the house value paid upfront. Whereas some loans permit down funds as little as 3-5%some consumers purpose for 20% to keep away from personal mortgage insurance coverage (PMI).
- 3% down: $13,200
- 5% down: $22,000
- 10% down: $44,000
- 15% down: $66,000
- 20% down: $88,000 (avoids PMI)
The next down cost can cut back your month-to-month mortgage and complete curiosity paid over time.
Closing prices
Prices related to the acquisition and sale of a house like taxes, title insurance coverage, and lender charges, are thought of closing prices. Though they’ll fluctuate primarily based on the mortgage program, you possibly can sometimes count on to pay between 2% and 5% of the acquisition value as a homebuyer. For a $440,000 dwelling, you possibly can count on to pay $8,800 to $22,000.
What’s included in closing prices?
Word: earnest cash just isn’t a closing value, although it’s usually utilized at closing.
Transferring prices
Transferring prices can fluctuate considerably primarily based on the space, the scale of your property, and whether or not you rent professionals or go for a DIY transfer. Right here’s what you possibly can count on:
- Native transfer (throughout the identical metropolis/state): ~$1,250 on common.
- Lengthy-distance transfer (out of state or throughout the nation): $2,500-$5,000+
- DIY transfer: Truck leases often value $100–$1,500, plus gasoline and provides
Extra elements resembling packing providers, shifting insurance coverage, and storage charges can even affect complete bills.
Different prices to contemplate when shopping for a home
Pay as you go prices
These are upfront funds for property taxes, householders insurance coverage, and mortgage curiosity—often held in an escrow account and paid in your behalf.
. These embrace:
- Property taxes: Often 1-2% of the house value yearly, with 2-3 months pay as you go at closing.
- Householders insurance coverage: Usually prices $1,500-$3,000 per 12 months, with 2-3 months pay as you go.
- Mortgage curiosity: Prorated curiosity for the remaining days within the month of closing, guaranteeing your first full mortgage cost aligns along with your mortgage schedule.
Mortgage curiosity, householders insurance coverage. property taxes, and the preliminary escrow deposit all fall beneath the umbrella of pay as you go prices.
Month-to-month mortgage funds
Mortgage funds are made month-to-month to cowl the price of buying a home. The mortgage cost has two parts: the principal, which will get paid down over time, and the curiosity.
A mortgage calculator might help you identify how a lot you possibly can count on to pay every month. For a $440,000 home with a 20% down cost and a 7.8% rate of interest, this comes out to a month-to-month cost of $3,168.
Mortgage insurance coverage
PMIor personal mortgage insurance coverage, is an expense paid by homebuyers that protects the lender in case you default in your mortgage. If you happen to put lower than 20% down on your home, you’ll doubtless be required to pay this extra value. On common, PMI prices between 0.5% and 1.5%.
- Estimated PMI on a $352,000 mortgage (20% down): $2,200 to $6,600 yearly
Components resembling your credit score rating and the time period of the mortgage can affect precisely how a lot you’ll find yourself paying for PMI. PMI is eliminated when you attain 20% fairness in your house.
HOA charges
Some housing developments, particularly townhomes and condosare managed by organizations generally known as householders associations (HOA)which funds upkeep, safety, and extra.
These funds are collected via month-to-month HOA charges, which often value you between $200 and $300 monthly. In communities that supply numerous further facilities or cities with the next value of residinglike San Franciscoyou possibly can count on to pay extra.
FAQs about homebuying prices
Are there any first-time homebuyer packages that may assist with prices?
Sure! Many states and cities provide down cost help packagesgrants, and low-interest loans for first-time homebuyers. FHA, VA, and USDA loans additionally present choices with decrease down cost necessities.
What different ongoing prices ought to I contemplate after shopping for a house?
Past your mortgage, property taxes, and insurance coverage, you’ll additionally have to finances for upkeep, repairs, utilities, and probably HOA charges. Specialists advocate setting apart 1-3% of your property’s worth per 12 months for upkeep bills.
What’s an escrow account, and why do I want one?
An escrow account is a particular account held by your lender to cowl property taxes and householders insurance coverage. A portion of your mortgage cost goes into this account every month, guaranteeing these payments are paid on time.
How can I cut back my mortgage rate of interest?
You may decrease your price by bettering your credit score rating, making a bigger down cost, or shopping for low cost factors (paying further upfront to cut back your rate of interest over the mortgage’s lifetime).
