How Much Cash You Actually Need to Buy a Home (Beyond the Down Payment)

Mike and Elke
16 minutes ago
2 min read

When buying a home, most buyers focus on the down payment. But that’s only part of the picture. There are several other costs that come into play before you get the keys, and being prepared for them can make the process far less stressful.

Here’s a breakdown of the cash buyers should plan for beyond the down payment.

1. Closing Costs

Closing costs typically range from 2–5% of the purchase price and can include:

Loan origination fees
Appraisal and credit report fees
Title insurance
Escrow and attorney fees
Prepaid taxes and insurance

These costs are due at closing and are separate from your down payment.

2. Earnest Money Deposit

Earnest money shows the seller you’re serious about buying.

What to expect:

Usually 1–3% of the purchase price
Applied toward your closing costs or down payment
Held in escrow once your offer is accepted

3. Home Inspection and Appraisal Fees

Before closing, buyers typically pay for:

Home inspection: a few hundred dollars
Appraisal: often required by the lender

These are paid upfront and are not usually refundable.

4. Moving Expenses

Moving costs are easy to overlook but add up quickly.

Common expenses include:

Moving truck or professional movers
Packing supplies
Temporary storage, if needed

5. Initial Repairs and Updates

Even move-in-ready homes often need small updates.

Examples:

Painting
Minor repairs
New locks or window treatments

Having a small repair fund helps avoid surprises after closing.

6. First-Year Homeownership Cushion

Many buyers forget to budget for:

Utility setup deposits
Furniture
Lawn care or HOA fees
Emergency repairs

A financial cushion provides peace of mind once you move in.

The Bottom Line

A good rule of thumb is to budget an additional 3–7% of the home’s price beyond your down payment to comfortably cover these costs.

Planning ahead helps you avoid last-minute stress and keeps your home purchase on solid financial footing.

If you’re thinking about buying and want help estimating your true upfront costs, having a clear plan can make all the difference.