This is How Much Money You Need to Buy a House

Category: Mortgages
Posted: 2/1/2021 | Read Time: 3min
Last Updated: 9/11/2021

Have you thought about buying a home for the first time? If so, you are probably wondering, “how much money do you need to buy a house?” The amount of money that you will need for a house loan depends on several key factors. 

Costs You Can Control

One of the main factors to take into consideration is the state you are going to be purchasing your home in. When it comes to real estate, not all states are created equal. Neither are all counties. Each county has its own unique property tax percentage, which will affect how much money you need to buy a house. Lastly, take into consideration the neighborhood or school district. Oftentimes, even just a few miles can make a significant difference in the cost of a home. Once you know where you are going to purchase a home, consider the property type: an existing home or new construction. This will also play a role in determining the overall amount you’ll need to purchase a home. 

These costs you can control will help you answer the question, “how much money do you need to buy a house?” Look here to find the answers to other frequently asked mortgage questions, including the role credit plays in your home cost. 

Biggest Costs Associated with Buying a Home

Down Payment

A down payment is a payment made during the initial stages of purchasing a home that is a percentage of the full purchase price. Your down payment amount affects your monthly mortgage amount. For example, a common down payment is 3 percent of the purchase price. Using this option for a house with a purchase price of $311,000, your down payment would be $9,333. Use our simple mortgage calculator to get a better idea of how much down payment you need on a house for your monthly payment to be the right price for you. 

MORTGAGE CALCULATOR

Run the Numbers on Financing Your Dream Home.

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Closing cost

Closing costs are fees and expenses you pay when you close on a new home. These costs can range between 3 to 5 percent of the loan amount. For example, after making your down payment of $9,333 on the purchase price of $311,000, you could expect closing costs between $9,050-$15,083.

Home Inspection

A home inspection is an examination of a property’s condition and its various systems. A home must meet certain state and lender requirements to acquire its house loan. A new home buyer can expect to spend between $300 and $500 for a home inspection. 

Appraisal

An appraisal is a valuation of a property and home by an authorized appraiser to determine the current market value of the home. An appraisal is required by lenders to ensure the home is worth the amount of money they will be lending the borrower. A new homebuyer can expect to pay roughly $400 to $500 for a home appraisal.

Loan Origination Fees

Loan origination fees are costs associated with the loan application process. Typically, loan origination fees are between 0.5 and 1 percent. To continue with our example, for a loan amount of $301,667 – that was established after paying the down payment of 3 percent ($9,333) – you could expect loan origination fees to be between $1,508 and $3,016. However, choosing to work with a direct mortgage company will save you money in the home buying process. 

Other Costs Associated with Buying a Home

Other important costs to consider include:

  • Home Mortgage Rates
  • Home Insurance
  • Mortgage Insurance
  • Property Taxes
  • Utilities
  • Moving Costs
  • Home Warranty
  • HOA Fees

So, how much money do you need to buy a house? The amount varies depending on your specific situation. However, considering these factors, you can determine the amount which best works in your budget.


Matthew Harris is the Internal Communications Manager at Wyndham Capital Mortgage. With over 11 years of experience writing and creating content about topics from sports and culture to financial systems and business, Matthew brings his expertise to the mortgage industry. Matthew oversees Wyndham’s internal communication and content strategies to help drive the internal messaging and creating content that gives both employees and borrowers relevant and reliable information to help them make informed homebuying, selling and refinancing decisions. Matthew has a Master’s Degree in Communications from Purdue University and a Bachelor's Degree in Journalism from Appalachian State University. His interests include social media marketing, content creation and catching the occasional sports game.

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