How Much Money Do You Really Need to Buy a House?

 

Buying a home is one of the most exciting — and often one of the most overwhelming — milestones in life. If you’re wondering how much money you need to buy a house, you’re not alone. Whether you're a first-time buyer or planning your next move, understanding the upfront costs will help you feel more confident and prepared.

Let’s break it down step-by-step.

1. Down Payment

The down payment is typically your biggest upfront expense.

  • Conventional loans often require 3% to 20% down.

  • FHA loans can go as low as 3.5% down.

  • VA loans and USDA loans may offer 0% down options for qualified buyers.

Example:
For a $400,000 home:

  • 3% down = $12,000

  • 5% down = $20,000

  • 20% down = $80,000

Tip: The more you put down, the lower your monthly payment and private mortgage insurance (PMI), if required. 

 

2. Closing Costs

Closing costs typically range from 2% to 5% of the home’s purchase price and include fees for:

  • Loan origination

  • Title insurance

  • Appraisal

  • Escrow services

  • Recording and transfer taxes

For a $400,000 home, expect $8,000 to $20,000 in closing costs.
Sometimes, you can negotiate with the seller to cover part of these costs.

 

3. Earnest Money Deposit (EMD)

When you make an offer on a home, you’ll often submit an earnest money deposit to show you’re serious. This is typically 1% to 3% of the purchase price and is credited toward your down payment or closing costs at closing.

 

4. Inspections and Appraisals

Before closing, you’ll pay out of pocket for:

  • Home Inspection: $300–$600

  • Appraisal: $400–$700

  • Optional inspections (pest, roof, mold, etc.) depending on the home and location

 

5. Moving Costs & Initial Setup

Don’t forget about:

  • Moving services or truck rental

  • New furniture or appliances

  • Utility deposits

  • Homeowners insurance (required by lenders)

  • Prepaid property taxes and escrow reserves

 

So, What’s the Bottom Line?

Here’s a rough estimate for a $400,000 home:

Expense Low Estimate High Estimate
Down Payment (3–20%) $12,000 $80,000
Closing Costs (2–5%) $8,000 $20,000
Inspections & Appraisal $700 $1,200
Moving & Setup $1,000 $5,000
Total Needed $21,700 $106,200

 

Ready to Buy?

You don’t need to figure it all out alone. As a Tampa Bay Realtor, I can guide you through affordable loan options, grants, and strategic planning to help you reach your goal — whether you’re buying your first home or your forever home.

Contact me today for a personalized home buying budget breakdown. Let’s turn your dream of homeownership into a reality.