Money Needed to Buy a New Home 

The upfront cash needed to buy a house includes the down payment, 2.5% of your loan amount for closing costs and, sometimes, at least two months’ worth of cash reserves.

Here’s how much money you might need to save to buy a house, at a few different price points*.

Money Needed for a $400,000 House

Cash needed to buy a $400,000 house might start around $27,000, if you qualify for a 3% down payment conventional loan.

Home buyers using the FHA program might see an upfront cost closer to $24,000 - but note, FHA loan limits max out at $420,680 in most areas. So, a $400,000 home might require a larger down payment to get your loan amount below local limits.

C L (3% down)   C L (20% down)

Down Payment           $12,000   $80,000
Closing Costs (2.5%) $10,000   $10,000
Cash Reserves              $5,000     $3,600
Total Money Needed  $27,000   $93,600

Money Needed for a $600,000 House

As your home price increases, your loan options may decrease. That’s because higher-cost real estate often surpasses FHA and conventional loan limits.

To compensate, borrowers must either make a larger down payment or opt for a jumbo mortgage.

To buy a $600,000 house, you’d likely need to put at least 10% down on a conventional mortgage. You may need a total savings of around $78,400 or more.

C L (10% down)   C L (20% down)

Down Payment           $60,000    $120,000
Closing Costs (2%)    $12,000      $12,000
Cash Reserves              $6,400        $5,400
Total Money Needed: $78,400    $137,400

*All examples assume a 30-year fixed mortgage interest rate of 3.25%. Closing costs are only an estimate. Your own rate and costs will vary.