How much money do you need to buy a house?

How much money do you need to buy a house?

Whether it’s a starter home, a forever home or a vacation home, buying a house is an exciting endeavor.

Having said that, there’s no doubt that this purchase can also feel overwhelming.

Especially considering that this is likely one of the largest purchases you’ll ever make.

If you’re getting a mortgage, a smart way to buy a house is to save up at least 25% of its sale price in cash to cover a down payment.

If you buy a home for $250,000, you might pay more than $60,000 to cover all of the different buying expenses.

Another significant expense in buying a house is closing costs which can range from around 2% to 6% of the purchase price.

Your monthly mortgage payment is one of the most predictable ongoing costs.

For example, if you borrow $240,000 and finance it with a 30-year, fixed-rate mortgage at 5%, you’d pay $1,288 in monthly principal and interest.

In addition to paying the principal and interest, your mortgage payment will include mortgage insurance if you put less than 20% down.

When it comes to how much money you need for a house, there’s much more than the listing price to consider.

Ensure to account for both upfront and ongoing expenses when creating a budget.