Buying a home is a lifetime accomplishment, and if you’re serious about the purchase, you need the funds to back it up.

Here’s a list of the cash needed to close the sale*

*using the example of a $200,000 home.

  • Earnest money deposit: This is what’s used to put down on a house up front. Earnest money goes in an escrow account until the closing date, when it becomes part of the down payment. Earnest money is about 1-3% of the total cost of the home. Cost: $6,000
  • Down payment: Usually the biggest cost of buying a home, the down payment ranges from 3.5% up to 20%, depending on the type of loan you’re qualified for. The more you put down, the lower your monthly payments will be. Cost (including the earnest money deposit): $40,000
  • Closing costs: The “closing costs” is the costs associated with processing all the administrative paperwork. Closing costs include property taxes, prepaid interest, lender charges, and inspection fees. These are usually just a little lower than the down payment, although closing costs have the potential to be more expensive. These will run you about 2-4% of the cost of the home. Cost: $4,000
  • Moving expenses: These aren’t normally associated with the cash needed to buy a home, but it’s a vital one. Immediately after closing you’ll want to move in, and that’s no small task. It generally costs less to move within your state than from outside the state. Cost: $2,000 – $4,000
  • Emergency funds: Finally, put aside some cash in reserve. This acts as an emergency fund that you can use just in case an unexpected expense pops up. Experts say that you should consider 3 months worth of income saved and set aside. Cost: 3 months salary


So what’s the cash amount needed for a $200,000 house? Not including the emergency funds, you’re looking (at most) $48,000. Every situation is different, so be sure to take the time and calculate what works best for you.