How Much Money Do I Need to Buy a Home?
6 min read · Updated 2026-08-01
Cash to close, reserves, and the costs that arrive right after closing.
Cash to close
The two large components are the down payment and closing costs. Closing costs commonly run 2% to 5% of the purchase price and include lender fees, title and escrow charges, transfer taxes, appraisal and inspection, and prepaid property tax and insurance.
Reserves
Lenders may require you to show several months of housing payments in reserve. Independent of the requirement, holding reserves is what keeps a repair or a job gap from becoming a crisis.
The first year after closing
New owners routinely underestimate the immediate spending that follows closing: appliances, window coverings, locks, paint, tools, lawn equipment, and the first unexpected repair. Budget for it before you commit every dollar to the down payment.
This guide is general information, not financial, tax, or legal advice. Figures are estimates and vary by lender, insurer, and location.
Keep reading
- What Are Closing Costs?
Every fee bundled into closing and which ones you can influence.
- What Is a Down Payment?
Why the down payment matters beyond the headline percentage.