How much money do I need to buy a house?

The total upfront cash you need to buy a house falls into three categories: the down payment, closing costs, and earnest money.

Down Payment

The minimum down payment depends on your loan type:

• Conventional loan: As low as 3–5%, though you'll pay PMI if you put down less than 20%
• FHA loan: 3.5% with a credit score of 580 or higher
• VA loan: No down payment required for eligible veterans and service members
• USDA loan: No down payment required for eligible rural properties

A higher down payment means a smaller loan, lower monthly payment, and potentially no mortgage insurance, but it also means more cash tied up at closing.

Closing Costs

Closing costs typically run 2–5% of the loan amount. On a $300,000 loan, that's $6,000–$15,000. These cover lender fees, title insurance, prepaid homeowners insurance, prepaid property taxes, and various other charges.

One way to reduce out-of-pocket closing costs is to negotiate seller concessions, asking the seller to contribute toward your costs as part of the purchase agreement.

Earnest Money

Earnest money (typically 1–2% of the purchase price) is submitted with your offer and held in escrow. At closing, it's applied toward your down payment or closing costs, so it's not an extra expense, just money you commit early.

A Realistic Example

On a $280,000 home with a conventional loan at 5% down: - Down payment: $14,000 - Closing costs: approximately $6,000–$9,000 - Earnest money: $2,800 (credited at closing) - Total cash needed at closing: roughly $18,000–$21,000

Getting pre-approved with a lender is the clearest path to understanding exactly what you'll need for your situation.