How Much Cash Do You Need to Buy Your First Home?
AI illustration of first-time buyers visiting a South Carolina home.
Save for your down payment, closing costs, and the bills you’ll pay before you get the keys. Then set aside money for the move and for costs that come up after you move in. On a $300,000 home, a buyer putting $15,000 down might aim to save $32,000 in all. Here’s how that budget could work.
What might you pay before closing?
Earnest money is a deposit you may pay after you sign a contract to buy a home. Your contract sets the amount and when it’s due. Ask your agent when you could get it back if the sale falls through. If the sale closes and the deposit is credited to you, it lowers the amount you still need to bring. See how your deposit appears on the Loan Estimate.
Home inspections can also come out of your pocket before closing. Ask what the home inspection costs and whether you need a separate check, such as a termite inspection. Ask your lender when the appraisal fee is due, too. If you pay a fee early, check whether it’s already in your closing estimate so you count it once. See the CFPB’s home inspection guide.
How much will you need at closing?
Start with your down payment and closing costs. Closing costs can include lender fees, title work, and recording fees. You may also pay some costs ahead of time, such as your first year of home insurance. If your lender sets up an escrow account to pay taxes and insurance, you may need to put money into that account at closing.
Look for Estimated Cash to Close on page 2 of your Loan Estimate. It shows what you’d still need after your deposit, any credits, and other changes. Check the amount again on your Closing Disclosure before you pay.
How much should you keep after you buy?
Price the move and list the things you’ll need right away, like a truck, utility setup, or a small repair. Then pick a cash cushion you want to keep in the bank. Think about how you’d cover a surprise repair or a gap in pay. The CFPB’s down payment guide can help you set that money aside before you decide how much to put down.
Some loans require you to show that you’ll have money left after closing. Your lender may call this money reserves. Ask how much you need and whether the money you already plan to keep in the bank can count.
What could a savings plan look like for a $300,000 home?
Say you plan to put 5% down, or $15,000. You budget $9,000 for closing costs, including any up-front insurance and escrow deposit in this example. You pay $3,000 in earnest money, which is credited at closing. This budget assumes you have no seller or lender credits.
- Before closing
- $3,600. The $3,000 deposit and a $600 inspection.
- At closing
- $21,000. The $15,000 down payment plus $9,000 in closing costs, less the $3,000 deposit you already paid.
- After closing
- $7,400 set aside. That gives you $1,400 for the move and $6,000 to keep in the bank.
Total savings goal for this example: $32,000. Use your own down payment, fee estimates, and moving costs to set your goal. If you’re short, ask your lender to compare a smaller down payment with a lower home price. Check how each choice would change the cash you need, the full monthly payment, and what you’d have left.
More help with your first home budget
Let’s put a number on your savings goal
Tell us your price range, where you want to buy, and how much cash you’d like to keep after closing. We can help you estimate what you’d need up front and compare your loan options.
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