Loans By Kathy: How Much Money Do I Need to Buy a Home?

How Much Money Do I Need to Buy a Home?

How much money do I need to buy a home?  Well, the simple answer is it will depend. Kathy Sheehan

The first question that needs to be answered is which financing program you are applying for.  Each program has their own minimum down payment requirements.  For example, the FHA mortgage will require a 3.5% down payment whereas, the USDA loan is a 100% financing program that does not require a down payment.  The conventional Homepath program only requires a minimum of 3%.  And of course, I can't forget the $100 down HUD program for the purchase of a HUD foreclosure.

Now that we have covered the down payment question.  What else will you need?  You are going to need earnest money to go with your purchase agreement.  This can be as little at $500 or several thousand dollars, depending on the purchase price.  Your real estate agent will be able to advise you as what is customary in your marketplace.

Now that you have the offer accepted, you will want to have the home inspected.  These fees are usually tied to the size of the home.  For most first time home buyers it is between $300-400.  Again, consult your real estate agent for recommendations and estimated costs.

Lastly, you will need to pay for the appraisal and possibly a credit report fee or application fee.  Most appraisals will cost between $400-500 and the credit report fees, generally not more than $100.  You will see these fees on your settlement statement as paid outside of closing.

It is important to note that these costs ARE NOT part of your down payment!

One last item to consider are the closing costs.  In most transaction lately, the seller is paying most, if not all of the closing costs.  If the seller is not willing to do that, you will need to have those funds in order to close.  Working with an experienced real estate agent and mortgage loan originator can help you structure your offer to cover these costs.

How much money do I need to buy a home?  You do the math!


Disclaimer: The above mentioned fees are common for these services but in no way are intended to be a guarantee of costs.


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Kathy Sheehan Senior Loan Officer






Bay Equity LLC

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11475 Great Oaks Way, Suite 350, Alpharetta, GA 30002

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The opinions and general information in this blog are soley those of Kathy Sheehan.  Specifics regarding an individual case should be discussed in detail with a loan professional.  For a confidential consultation, please feel free to contact me via phone or email.  All terms and conditions are subject to change.


Comment balloon 4 commentsKathy Sheehan • May 19 2013 04:48PM


Excellent outline of what many buyers are no doubt wondering - how much money do they need to buy a home?  

Posted by Susan Haughton, Susan & Mindy Team...Honesty. Integrity. Results. (Long and Foster REALTORS (703) 470-4545) over 4 years ago

Susan, thank you for your comment.

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 4 years ago

Kathy~ There is much that is included in the answer to that question. Financing and down payment, earnest money, inspection, appraisal, credit report and of course, closing costs. Anyone who is seriously considering buying a home needs to work with a lending professional to get all of the answers to their specific situation.

Posted by Donna Foerster, Metro Denver Real Estate Agent (HomeSmart Realty Group) over 4 years ago

Yes, Donna that is true!

Posted by Kathy Sheehan, Senior Loan Officer (Bay Equity, LLC 770-634-4021) over 4 years ago