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If you're in the market for a new home, you may be wondering, "How much do I need to buy a house?" From down payments and closing costs to reserves and moving expenses, the thought of buying a house can quickly become overwhelming. For example, what are some of the factors that will determine how much you need to save to get your home ownership goals off the ground? The good news is that the money you need for homebuying breaks into three main buckets: down payment, closing costs, and moving expenses.

Your Down Payment

When you think, "How much do I need to buy a house?" the first expense that comes to mind will likely be your down payment. A down payment is a percentage of the purchase price that your lender will require to demonstrate your investment in homeownership.

Be sure to work with a lender to get pre-qualified early on in the homebuying process in order to figure out how much you can afford. During this process, you may also determine what kind of mortgage works best for you, which will help you calculate how much of a down payment you'll need to have when you're ready to go house hunting.

Closing Costs

Mortgages have fees that are required to close the loan. These can include lender fees, title and settlement fees, appraisal costs, property taxes, homeowner association fees, insurance payments, and various documentation fees. While unavoidable, they aren't set in stone and may vary by lender.

After you've determined what you can afford and have an idea of how much you'll need to save for a down payment, compare lenders to find the best deal on closing costs. With a little comparison shopping, you can often save hundreds to thousands of dollars. After all, the less you spend on closing costs, the more you can put toward your down payment and your moving expenses.

You'll also need funds in your bank account on reserve for future mortgage payments, taxes, insurance, and homeowner's association (HOA) dues if applicable. These funds will need to be in your account from the beginning of the mortgage approval process to show your lender that you're not using all of your available funds to close on the home.

Moving Expenses

Moving expenses are often the most easily overlooked cost that you should try to plan for. Your moving expenses include everything from move-in utility costs to the physical moving expenses (moving truck, moving service, gas, etc.) and starter furnishings for your new home.

To help get a dollar figure in mind, you can start with a few simple tasks. First, take inventory of what you have that will be moving with you like furniture, kitchen supplies, and other items that might be boxed-up. Then, you can use that inventory to get preliminary quotes from both full- and self-service moving companies. Don't forget to factor in things like airline tickets, hotels, and gas if you're making a cross-country move.

Finally, consider the furnishings you'll need to make your new home comfortable. If budget is an issue, you can begin furnishing the rooms with essentials and then leaving other areas until after you've moved in and had time to unpack.

The answer to, "How much do I need to buy a home?" isn't as straightforward as you might like. However, by sorting what you'll financially need before you need it, you'll have a better understanding of how much home you can afford, the money you'll need for closing, and the additional expenses you'll need to cover to call it home once you arrive on the doorstep.

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.

By selecting any external link on, you will leave the KeyBank website and jump to an unaffiliated third-party website that may offer a different privacy policy and level of security. The third-party is responsible for website content and system availability. KeyBank does not offer, endorse, recommend or guarantee any product or service available on that entity's website.

NOTICE: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. Information and offers are subject to change without notice. All loans are subject to credit and collateral approval. Not all loans or products are available in all states.

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