Shopping for a home is among the greatest monetary choices you’ll ever make, and it’s not simply in regards to the sale worth. From the down cost to closing prices, there are a number of different bills to think about. 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 price that will help you funds successfully and keep away from surprises.
How a lot cash do I want to purchase a home?
You don’t want to avoid wasting 25% to 30% of a house’s worth to turn into a house owner. In reality, many consumers, particularly first-timers, put down far much less.
As a common rule, saving 10% to fifteen% of the acquisition worth is a great objective. That ought to cowl your down cost and closing prices, whereas supplying you with a cushion for shifting and different preliminary bills.
We’ll use the median U.S. dwelling worth—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 completely different worth 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 a very powerful prices you’ll must 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 few of the key upfront homebuying prices you have to be conscious of:
| Homebuying Value | Value Breakdown (% of sale worth) | Complete Value ($440,000 home) |
| Earnest cash deposit | 1%-3% | $4,400-$13,200 |
| Down Fee | 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 with no legitimate motive. It sometimes ranges from 1% to three% of the house worth. For a $440,000 dwelling, count on to pay $4,400 to $13,200. This quantity is normally utilized towards your down cost or closing prices.
Down cost
Your down cost is a share of the house worth paid upfront. Whereas some loans enable 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 may sometimes count on to pay between 2% and 5% of the acquisition worth as a homebuyer. For a $440,000 dwelling, you may count on to pay $8,800 to $22,000.
What’s included in closing prices?
Observe: earnest cash will not be a closing price, although it’s usually utilized at closing.
Transferring prices
Transferring prices can fluctuate considerably primarily based on the gap, the scale of your house, and whether or not you rent professionals or go for a DIY transfer. Right here’s what you may count on:
- Native transfer (inside the similar metropolis/state): ~$1,250 on common.
- Lengthy-distance transfer (out of state or throughout the nation): $2,500-$5,000+
- DIY transfer: Truck leases normally price $100–$1,500, plus gas and provides
Extra components similar to packing providers, shifting insurance coverage, and storage charges may also influence complete bills.
Different prices to think about when shopping for a home
Pay as you go prices
These are upfront funds for property taxes, owners insurance coverage, and mortgage curiosity—normally held in an escrow account and paid in your behalf.
. These embody:
- Property taxes: Normally 1-2% of the house worth yearly, with 2-3 months pay as you go at closing.
- Owners insurance coverage: Usually prices $1,500-$3,000 per yr, 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 together with your mortgage schedule.
Mortgage curiosity, owners insurance coverage. property taxes, and the preliminary escrow deposit all fall underneath 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 elements: the principal, which will get paid down over time, and the curiosity.
A mortgage calculator can assist you establish how a lot you may 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
PMI, or personal mortgage insurance coverage, is an expense paid by homebuyers that protects the lender in case you default in your mortgage. In case you put lower than 20% down on your own home, you’ll doubtless be required to pay this extra price. 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 similar to your credit score rating and the time period of the mortgage can influence 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 condos, are managed by organizations often called owners associations (HOA), which funds upkeep, safety, and extra.
These funds are collected by means of month-to-month HOA charges, which normally price you between $200 and $300 monthly. In communities that supply numerous further facilities or cities with the next price of dwelling, like San Francisco, you may count on to pay extra.
FAQs about homebuying prices
Are there any first-time homebuyer applications that may assist with prices?
Sure! Many states and cities provide down cost help applications, grants, 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 must funds for upkeep, repairs, utilities, and presumably HOA charges. Specialists advocate setting apart 1-3% of your house’s worth per yr 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 owners 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 possibly can decrease your fee by enhancing 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).
