Most people focus on the down payment — but that's just one piece. Here's the full picture of what you actually need to have saved before you close.
The down payment
- Conventional: As low as 3% (first-time buyers), typically 5-20%. Under 20% means PMI.
- FHA: 3.5% with a 580+ credit score.
- VA / USDA: 0% down — no down payment required.
Closing costs
This surprises most first-time buyers. Closing costs run 2-5% of the loan amount and cover things like origination fees, appraisal, title insurance, prepaid taxes, and homeowners insurance. On a $350,000 home that's roughly $7,000-$17,500 on top of your down payment.
Reserves
Many loan programs require you to have 2-6 months of mortgage payments sitting in savings after closing. This proves to the lender you won't immediately run into trouble. FHA and VA don't always require reserves, but conventional loans often do.
Moving and immediate costs
Budget for moving expenses, any immediate repairs, appliances if the home doesn't have them, and general setup costs. These aren't part of your loan — they come out of pocket.
Actual costs vary by location, loan type, and lender. Always get an official Loan Estimate to understand your specific closing costs.