How Much Money Do You Need to Buy a Home?

Down payment, closing costs, and real-world ways to make homeownership possible

One of the biggest myths about buying a home is that you “need 20% down.” In reality, many buyers can purchase with far less—and sometimes with little to no out-of-pocket funds, depending on the loan program, down payment assistance options, and whether the seller contributes toward closing costs.

In this workshop replay, I break down the real costs of buying a home, when those costs show up during the transaction, and the most common (and acceptable) ways to source your funds—so you can plan with confidence.

Watch the Workshop Replay

This workshop is ideal if you’re:

• Trying to figure out how much cash you’ll really need to buy a home
• Saving for a down payment but unsure what else to budget for
• Curious about down payment assistance, grants, or seller-paid closing costs
• Wondering what “verified funds” and “seasoned funds” mean
• Planning ahead and want to avoid last-minute surprises

What You’ll Learn in This Workshop

1) The three main buckets of money needed to buy a home

Most of your funds fall into these categories:

Down payment
The difference between the purchase price and your loan amount. Some programs require a minimum down payment, and some may allow 0% down.

Closing costs
One-time fees involved in financing and closing the purchase. These can include lender fees, third-party fees (like appraisal and title/escrow), and government recording fees.

Prepaids and reserves
Funds collected for items like homeowners insurance and property taxes (often held in an escrow account), plus pro-rated interest depending on when you close.

You may also have recommended costs outside the mortgage, like home inspections, which are often paid at the time of service.

2) You probably don’t need 20% down

Here are examples shared in the workshop:

• Conventional loans can be as low as 3% down
• FHA loans are commonly 3.5% down
• VA and USDA may allow 0% down (if eligible)
• Jumbo loans often require higher down payments (varies by loan amount and area)

And on top of that, down payment assistance programs and grants may be available (depending on eligibility).

3) What’s included in a monthly mortgage payment

A mortgage payment is usually made up of:

• Principal & Interest (doesn’t change on a fixed rate loan)
• Property Taxes (collected monthly, paid when due, can change over time)
• Homeowners Insurance (you shop for it; lender needs the premium for qualifying)
• Mortgage Insurance (if applicable, such as less than 20% down or FHA)

Understanding this helps you plan both the upfront funds and the monthly payment.

4) When you’ll need money during the transaction

Funds show up at different points:

• Earnest money deposit when you make an offer (credited toward your funds at closing)
• Home inspection (usually paid at the time of inspection)
• Appraisal fee after your offer is accepted and the loan is in process
• Down payment + closing costs due just before closing (wired to escrow)

5) “Verified funds” and why documentation matters

A key part of the mortgage process is proving where funds come from. Lenders typically review bank statements line-by-line, and large deposits must be explained.

Important takeaway: Cash is not an acceptable source (because it can’t be documented). Even if it’s been saved for years, it generally can’t be used unless it’s been deposited and “seasoned.”

Seasoned funds generally means money that has been in your account long enough that it no longer needs to be sourced (commonly shown across two months of bank statements without the deposit appearing).

Ways Buyers Commonly Source Funds for Closing

Here are common acceptable sources (when properly documented):

• Savings and checking accounts
• Stocks/bonds or other asset accounts
• IRS tax refunds
• Retirement funds or 401(k) loans (check plan rules)
• Gifts from family members (with a gift letter + documentation)
• Proceeds from selling an asset
• Down payment assistance programs
• Grants (when available)
• Seller contribution toward closing costs (must be negotiated in the contract)

Down Payment Assistance in Washington State

In the workshop, I discuss popular programs such as the Washington State Housing Finance Commission Home Advantage program and how down payment assistance typically works (often as a second mortgage, sometimes at 0% interest, typically repaid when you sell or refinance).

There are also grant programs that may not need to be repaid, but they can be limited and eligibility-based.

The biggest takeaway: these programs can be powerful — and it’s important to compare options to find what fits your goals.

Get the Companion Workbook & Resources

Each workshop in my Home Buyer Workshop Series includes companion resources to help you apply what you’re learning.

📘 Request the workshop workbook/resources here:
👉 Workshop Resources Landing Page
(Select “How Much Money Do You Need to Buy a Home”)

✔ Delivered by email
✔ Education-first
✔ No pressure

What’s Next

This workshop is part of my Home Buyer Workshop Series, designed to walk you through the process step-by-step.

👉 Visit the Home Buyer Workshop Hub page here

If you have questions as you watch, feel free to reach out — I’m always happy to help you build a plan that fits your timeline and goals.