buy a home


How Much Does it Cost to Buy a House?

A house is probably the most expensive thing you’ll ever buy. Many people refer to it as their biggest investment.

How much money do you need to buy a house? The answer to that question depends on a number of factors.

How Much It Costs to Buy a House: Sale Price

The largest cost of buying a house is the home or property itself. The price of the home is subjective and based on factors such as:

  • Time of the year
  • How eager the seller is to get out of the home
  • General location
  • Local schools (homes in better school districts tend to sell for more)
  • Condition of the house

Recent and current selling prices of other homes in the neighborhood

Pricing your home is not an exact science. Though a seller may list it for a certain price – say $200,000 – they may be willing to accept less. On the flip side, if there’s a very high demand for the home it might sell for more than the asking price.

However, even though the sale price is the biggest cost, there are other factors that play into how much it costs to buy a house.

Down Payment: The Biggest Upfront Cost

Many things stem from the selling price of the home. The down payment, which is the biggest cost upfront, is no exception. To get a conventional loan that doesn’t require PMI, you need a down payment of at least 20% of the home’s purchase price. So, if you buy a home for $200,000, you need at least $40,000 to put down.

This doesn’t apply if you’re getting a VA mortgage. When it comes to these mortgages there is no minimum down payment required.

Costs to Buy a House: Closing Costs

In addition to the down payment, you’ll also need to pay closing costs when you buy a home. Each closing is different, but expect the total of these costs to come out to be between 2% to 5% of the home’s purchase price. The sale of a $200,000 home would have closing costs between $4,000 to $10,000.

Mortgage Costs

Last but not least, let’s talk about your monthly payments after you have purchased a home. Your monthly mortgage payments are distributed among three categories:

  • Paying off the principal
  • Paying interest on the mortgage
  • Paying private mortgage insurance (if applicable)

The amount required by each category depends on the mortgage itself. If you took out a 15-year mortgage, your monthly payment is higher than a 30-year loan, but you’re also paying down the principal much faster.

Likewise, the amount of interest you pay every month is based on the interest rate on the mortgage. If you have great credit, a favorable debt-to-income ratio, and are generally considered a good risk for lenders, you will likely get a favorable rate.


Many factors affect the cost of a house. If you have any questions or need any help finding the right house for your budget give us a call at (844) 824-5626. We’d love to help you get into your dream home.

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