How Much Money Will I Need To Buy a House?

Quick Links

If you’ve never bought a home before, it can feel like everyone is speaking another language—and the money part is the most confusing. Most people know they’ll need a down payment, but that’s only one piece. You also need to plan for inspections, lender fees, title and escrow costs, prepaid items (like insurance and taxes), and move-in expenses.

This guide walks you through every cost you may encounter—from the day you start searching to the day you move in—using plain language and real examples. We will also explain how real estate commissions work so there are no surprises.

The 5 “Buckets” of Money You Should Plan For

To keep it simple, think of buying a home as five buckets of money:

  1. Upfront “getting ready” costs (before you’re under contract)
  2. Offer + contract costs (money you put down to show you’re serious)
  3. Inspections + investigation costs (making sure you understand what you’re buying)
  4. Closing-day costs (the bundle of fees required to finalize the purchase)
  5. Move-in + first-month costs (moving, utilities, and initial setup)

Many buyers use this general planning structure:

  • Down payment (varies by loan type)
  • Closing costs (often around 2%–5% of the purchase price as a planning estimate)
  • Move-in cushion (a reserve for the first 30–60 days)

The only true number that matters will come from your lender’s official Loan Estimate, which outlines your projected cash-to-close.

Step-by-Step: Every Cost You May Encounter

1) Upfront “Getting Ready” Costs

  • Credit report or application fees (some lenders charge these, some do not)
  • Pre-approval documentation (usually no cost, but always confirm)
  • Travel expenses (fuel, hotels, time off work if relocating)

These costs are typically small compared to closing day, but they happen early.

2) Offer + Contract Costs

Earnest Money Deposit (EMD)

Earnest money is a good-faith deposit that shows a seller you are serious. It is typically held by a neutral third party (often a title or escrow company) while the transaction moves forward.

  • Commonly ranges around 1%–3% of the purchase price (negotiable).
  • It is usually credited toward your total purchase at closing.
  • If the contract is canceled according to agreed timelines and contingencies, it may be refundable.

Example: On a $350,000 home, 1%–3% equals $3,500–$10,500.

3) Inspections + Investigation Costs

Home Inspection

A home inspection is a professional evaluation of the property’s visible systems and structure.

  • General inspection: typically several hundred dollars
  • Additional inspections (if needed): radon, sewer scope, septic, well, structural engineer, pest, roof

Rural properties often require additional due diligence such as well testing, septic inspection, irrigation review, or access verification.

Appraisal

An appraisal is required by most lenders. It confirms the home’s market value.

  • Typically several hundred dollars
  • Often paid during underwriting before closing

Survey (If Required)

A survey confirms property boundaries and may be necessary for acreage or boundary uncertainty.

4) Closing Day Costs

Closing costs are the combined fees required to transfer ownership and finalize your loan. Buyers often estimate these at roughly 2%–5% of the purchase price, though actual numbers vary by loan type and timing.

A) Lender Fees

B) Title + Escrow Fees

  • Title search
  • Title insurance policy
  • Escrow coordination fee
  • County recording fees

Idaho does not charge a statewide real estate transfer tax, which reduces certain closing cost items compared to other states.

C) Prepaid Items

Prepaids are funds collected upfront to ensure future bills are paid on time.

  • Homeowners insurance premium
  • Property tax proration
  • Prepaid daily interest
  • Escrow account reserves

D) Buyer Agent Compensation

Real estate compensation is negotiable and agreed upon in writing. Depending on how your transaction is structured:

  • The seller may contribute toward buyer-agent compensation.
  • The buyer and agent may agree to a separate compensation structure.
  • The cost may be negotiated as part of the overall offer.

Every transaction should clearly outline how representation is compensated before you proceed.

5) Move-In + First-Month Costs

  • Moving company or truck rental
  • Utility deposits and setup fees
  • Lock rekeying
  • Initial maintenance supplies
  • HOA transfer/setup fees (if applicable)
  • Immediate furnishings or appliances

It is wise to keep a financial cushion after closing so your home feels stable, not stressful.

Example Budget: $350,000 Purchase

Category Planning Range
3% Down Payment $10,500
5% Down Payment $17,500
10% Down Payment $35,000
Estimated Closing Costs (2%–5%) $7,000–$17,500

How Real Estate Two70 Helps You Plan

  • We help you estimate realistic cash-to-close numbers.
  • We coordinate timelines so inspection and lender costs are expected—not surprising.
  • We explain what is negotiable and what is standard.
  • We help you build a financial plan before you commit.

If you would like help building a clear, written plan for your price range, connect with a Real Estate Two70 agent here.

FAQ

Do I need 20% down?

No. Many loan options allow lower down payments. The tradeoff may be mortgage insurance or higher monthly payments.

Are closing costs separate from the down payment?

Yes. The down payment is your equity investment. Closing costs are the transaction and financing fees.

What is the best way to know exactly how much I need?

Request a Loan Estimate from a lender based on your target price range. That document will show your projected cash-to-close.

The Buyer Journey